Bitcoin is poised to make an extraordinary comeback from its retreat over the past couple of months. Owing to China’s intensified crackdown on cryptocurrencies, bitcoin mining is expected to shift to North America given favorable regulatory measures in that region. Furthermore, despite the U.K.’s regulatory ban on Binance cryptocurrency exchange, Bitcoin prices have risen 3.1% since.
A recent Bloomberg report suggests that Bitcoin prices might hit the $100,000 mark this year given the renewed interest in cryptocurrencies, newly launched crypto ETFs in Canada and Europe, and increasing institutional investment in the asset.
In light of these developments, Wall Street analysts expect crypto stocks Coinbase Global, Inc. (COIN) and Marathon Digital Holdings, Inc. (MARA) to deliver solid gains in the coming months.
Coinbase Global, Inc. (COIN)
COIN is the world’s third largest cryptocurrency exchange in terms of trading volume, with $2.33 billion worth trades placed over the past 24 hours. The San Francisco company went public on April 14 through a direct listing on Nasdaq stock exchange, making it one of the biggest IPOs so far in 2021. The stock opened at $381 on its public debut, 52.4% above the $250 reference price. Furthermore, shares of COIN gained 12.7% intraday during its first trading session to hit a $429.54 all-time high.
On May 19, COIN priced a private offering of convertible senior notes. It expects to raise $1.25 billion in gross proceeds from the offering, which gives investors the option to purchase up to $187.50 million worth of the notes.
COIN’s trading volume has increased 1,016.7% year-over-year to $335 billion in its fiscal first quarter, ended March 31, 2021. Total assets on the platform increased 1,211.8% from the same period last year to $223 billion. Its total transaction revenues rose 795.7% from the prior year quarter to $1.54 billion. Its net income came in at $771.46 million, up 2,312.9% from the year-ago value.
The $6.41 billion consensus revenue estimate for its fiscal year 2021 indicates a 402.1% improvement year-over-year. Analysts expect the company’s EPS to come in at $8.44 in the current year.
Of the 16 Wall Street analysts that rated COIN, 11 rated it Buy, four rated it Hold and one rated it Sell. The 12-month median price target of $381.93 indicates a 50.8% potential upside from its $253.30 the last closing price. The price targets range from a low of $225.00 to a high of $650.00.
Marathon Digital Holdings, Inc. (MARA)
MARA is a digital asset technology company that mines cryptocurrencies for the generation of digital assets. It is one of the largest enterprise cryptocurrency companies in North America. MARA, which is based in Las Vegas, Nev., in March became the first company to launch a North America based Bitcoin mining pool compliant with U.S. regulations and Office of Foreign Asset Control (OFAC) standards. The company was added to the Russell 2000 Index on June 28 owing to its impressive growth and progress over the past year.
On May 31, MARA adopted and implemented Bitcoin Core Version 0.21.1 and support from Taproot to its mining pool MaraPool. The company’s CEO Fred Thiel said, “By adopting the full standard Bitcoin core node, we will be validating transactions on the blockchain in the exact same way as all other miners who use the standard node. We look forward to continue being a collaborative and supportive member of the Bitcoin community and to realizing the vision of Bitcoin as the first decentralized, peer-to-peer payment network that is powered by its users rather than a central authority or middlemen.”
In March, MARA partnered with DMG Blockchain Solutions Inc. to leverage the latter’s Blockseer pool technology to filter transactions compliant with the U.S. regulations. The joint venture is expected to help MARA operate its Bitcoin mining pool with a 100% mining hash rate.
MARA mined 226.60 bitcoins in May, thereby increasing its total holdings to approximately 5,518 bitcoins, as of June 1. The company’s bitcoin mining volume increased 39.8% month-over-month in May.
The company’s total Bitcoin holdings have a $305.20 million market value. MARA’s revenues increased 1,454.1% year-over-year to $9.20 million in the first quarter, ended March 31, 2021. Its net income and EPS were $83.40 million and $0.87, respectively, indicating a substantial rise from negative year-ago values. MARA reported $137.40 million in adjusted EBITDA, representing a significant rise from the $479,000 loss it reported in the prior-year quarter.
Analysts expect MARA’s EPS to improve 1,683.3% year-over-year to $1.90 in l 2021. The company’s revenue is expected to rise 4,530.9% from the same period last year to $201.77 million. Shares of MARA have gained 3,347.3% over the past year, and 200.5% year-to-date.
As one of the first and largest U.S.-regulatory compliant bitcoin pool operators, Wall Street expects MARA to gain traction in the coming months. All three Wall Street analysts that rated MARA have rated it Buy. Analysts expect the stock to hit $45.67 within the next 12 months, indicating a 45.6% potential upside. Their price targets range from a low of $40.00 to a high of $50.00.
COIN shares were trading at $245.66 per share on Thursday afternoon, down $7.64 (-3.02%). Year-to-date, COIN has declined -25.17%, versus a 15.64% rise in the benchmark S&P 500 index during the same period.
About the Author: Aditi Ganguly
Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities.
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