Jefferies Lowers Marathon Digital's Target Price.
Last June, Bitcoin (BTC) mining experienced a slight decline in profitability compared to the previous month. The price of the world's largest cryptocurrency fell by more than 6% during this period, while the network's hashrate (a measure determining mining difficulty) remained stable. Investment bank Jefferies highlighted this issue in its latest research report published on Thursday.
Jefferies Warns the Sector and Lowers Marathon Digital's Target Price.
While the hashrate of the Bitcoin
network is considered an indicator of
competition in the mining sector,
mining difficulty is similarly linked to
hashrate. Accordingly, Jefferies lowered the target price for Marathon
Digital Holdings (MARA) shares from
$22 to $17 but maintained its "hold"
recommendation for the shares.
Marathon Digital's shares fell by approximately 0.7% to around $15 in pre-market trading following the report's release.
The report also noted that U.S.-listed mining companies achieved a larger share of Bitcoin production in July compared to June. These companies increased their share of the Bitcoin network's total hashrate to 21.1%, up from 20.7% the previous month. According to Jefferies, August will be more challenging for miners, as the Bitcoin price fell by around 5% this month while the network's hashrate began to rise again.
U.S. Bitcoin Miners Rapidly Increasing Market Share.
Jefferies analysts Jonathan Petersen and Joe Dickstein explained the reason for the expanding market share of U.S. miners by stating, "Public mining companies brought new capacities online faster than the network's hashrate growth.”
In this context, Marathon Digital
produced a total of 692 BTC in July, a
17% increase from the previous month, making it the largest Bitcoin producer in the sector. It was also
emphasized that the company's installed hashrate capacity is the largest in the industry.
