JPMorgan in its latest research revealed that the Bitcoin (BTC) mining industry is at a difficult time. This is due to several factors that can burden the Bitcoin mining industry.

One of them is the approval of a Bitcoin ETF that could catalyze a rally against the backdrop of record hashrate and block reward halving that threatens industry revenues and profitability.

JPMorgan explained it prefers mining operators that offer the best relative value considering existing hashrate, operational efficiency, power contracts, funded growth plans, and liquidity.

JPMorgan initiated coverage of bitcoin mining such as CleanSpark (CLSK) with an overweight rating and a price target of USD 5.50 or the equivalent of IDR 86,350 (assuming an exchange rate of IDR 15,700 per US dollar). Digital Marathon (MARA) with underweight with a target of USD 5.00 or equivalent to IDR 78,500.

Then Riot Platforms (RIOT) is underweight with a target of USD 6.50 or the equivalent of IDR 102,050, and Cipher Mining (CIFR) is at a neutral level. The bank also upgraded Iris Energy (IREN) to overweight from neutral.

“CleanSpark is the bank’s top choice, offering the best balance between scale, growth potential, electricity costs and relative value,” said JPMorgan in its research, quoted from Yahoo Finance, Thursday (12/10/2023).

JPMorgan also estimates the opportunity for a four-year block reward of around USD 20 billion or the equivalent of IDR 314 trillion at the current bitcoin price. However, the block halving, which is expected to occur in the second quarter of 2024, could impact profitability.

It is estimated that as much as 20 percent of network hashrate is at risk of halving due to less efficient mining computers being disabled.