JP Morgan published a long equity research note on the publicly-traded bitcoin miners.
They think valuations are rich relative to history based on a comparison of equity value to the total $ value of block subsidies in the upcoming epoch at today's $/btc.
Factoring in their estimated power costs, the 14 largest public miners are valued at 2.5x their total gross profit over the coming epoch. From this, they infer that the market is pricing in (1) higher $/btc (duh, but then... just buy bitcoin)
(2) declining hash rate (they think 80 EH/s goes offline after the halvening)
(3) longer ASIC useful life
They estimate global fleet efficiency at 30 j/TH and the average cost of power from $0.03-$0.05 per kWh.
Bitcioin transaction fees at ~O.8% of transaction value are called out as being much higher than the 0.15-0.2% charged by Visa/Mastercard, but in-line with what those companies charge for international transactions.
Hash rate growth is forecast to slow to 15 EH/s quarterly which, barring a move higher in $/btc equates to capex of 35% of estimated network gross profit.
They model a 30% post-halvening increase in $/btc based on an "arbitrage free" pricing model (future price is a function of spot price and carry cost).
Their favorite pick is $CIFR for its cheap ($0.027/kWh) fixed power price contracts through 2027.
$MARA has the highest beta to bitcoin price at 3.1x compared to others in the 1.5-2.0x range.
Matthew
npub13s…qry3d
2023-10-11 19:12:58
Author Public Key
npub13sfnkvgrc4eg4p4vzlpmdg0aavggjnwnfx5k2vjl6ytmgpfhz5zsvqry3dPublished at
2023-10-11 19:12:58Event JSON
{
"id": "5c63b3beaa449f39edfe2631e65c0fcff4f5030997ba0baeab21fd7c60f61f0c",
"pubkey": "8c133b3103c5728a86ac17c3b6a1fdeb10894dd349a965325fd117b405371505",
"created_at": 1697051578,
"kind": 1,
"tags": [],
"content": "JP Morgan published a long equity research note on the publicly-traded bitcoin miners.\n\nThey think valuations are rich relative to history based on a comparison of equity value to the total $ value of block subsidies in the upcoming epoch at today's $/btc.\n\nFactoring in their estimated power costs, the 14 largest public miners are valued at 2.5x their total gross profit over the coming epoch. From this, they infer that the market is pricing in (1) higher $/btc (duh, but then... just buy bitcoin)\n(2) declining hash rate (they think 80 EH/s goes offline after the halvening)\n(3) longer ASIC useful life\n\nThey estimate global fleet efficiency at 30 j/TH and the average cost of power from $0.03-$0.05 per kWh.\n\nBitcioin transaction fees at ~O.8% of transaction value are called out as being much higher than the 0.15-0.2% charged by Visa/Mastercard, but in-line with what those companies charge for international transactions.\n\nHash rate growth is forecast to slow to 15 EH/s quarterly which, barring a move higher in $/btc equates to capex of 35% of estimated network gross profit.\n\nThey model a 30% post-halvening increase in $/btc based on an \"arbitrage free\" pricing model (future price is a function of spot price and carry cost).\n\nTheir favorite pick is $CIFR for its cheap ($0.027/kWh) fixed power price contracts through 2027.\n\n$MARA has the highest beta to bitcoin price at 3.1x compared to others in the 1.5-2.0x range.",
"sig": "fb1862b04b444353a6bc29816b0c8d9dcbe739e0e9ae5c2a97e049813fc972ea5de82b9e9080e688cc15a514c79022e33c8fd6f380e1fd5f7a2a4ce2a75e0bbe"
}