- Wall Street brokers are moving to Bitcoin and crypto mining stocks.
- Brokers interested in Bitcoin is up by 5%.
The first digital asset, Bitcoin, is no pushover in the crypto market. This is owing to the massive rise of the digital asset since it was developed in 2009. The rise of the asset is why most traders in the market have it in their portfolios. Without a doubt, institutional interest in the asset is still ripe even though it has waned a little.
According to an analyst on Wall Street’s new update, Wall Street brokers’ interest in crypto mining stocks is now on the rise. The report was compiled by Christopher Brendler, an analyst for D.A Davidson, a firm on Wall Street. Brendler noted that new institutional investors are now turning to Bitcoin and other crypto mining stocks. He also mentioned that the new investors are skeptical about the valuation of the stocks.
Brendler says Wall Street brokers interested in Bitcoin has increased by 5%
Christopher Brendler, who recently researched crypto miners, noted that about 15% of the brokers on wall street are now seriously looking at Bitcoin. Also, this number makes up for the brokers that carry out payment-related services, which has now increased by 5%. Brendler, in his article, also mentioned that a few of them were already involved in the stocks and are now looking to enter deeper. He also positioned that most of the Wall Street brokers are already in the Bitcoin space agreed with the bull case that he mentioned in his research. However, most of them were still very skeptical regarding the valuation of the assets.
It is no longer news that Bitcoin’s price shot through the roof last week, creating a new all-time high. With crypto mining stocks also coming up, with some doing better than Bitcoin, wall street brokers are at a loss on the performance of the stocks in the future. In the last 12 months, Riot blockchain and Marathon Digital have witnessed a rise of 600% and 1500% compared to Bitcoin, which saw an increase of 377% in the same duration.
Crypto miners are leveraging on the price of Bitcoin
Brendler admits that they cannot value the sector using traditional valuation as cash inflows in the future are not predictable. However, he notes that crypto traders leverage on the price of Bitcoin, with most of their income coming from mining assets. This is the main reason why most of them hold on to as much as possible of their mined assets. He points out that most of them hodl their mined assets to earn from Bitcoin’s increase or get loans backed by Bitcoin.
According to Brendler, his top pick regarding the miners is Hut 8 Mining. He notes that the investment is currently trading at an estimated 4.4 times its EBITDA in 2022. The EBITDA is the measure of how much profits miners make. Meanwhile, most of Hut 8 Mining’s colleagues in the sector are presently trading at either 6.6 or 9.1 times their 2022 EBITDA. With Wall Street brokers interest in Bitcoin, it is possible that the asset sees a boost in price soon.