We recently published a list of 7 Best Bitcoin and Blockchain Stocks To Buy According to Analysts. In this article, we are going to take a look at where CleanSpark, Inc. (NASDAQ:CLSK) stands against the other Bitcoin and blockchain stocks.
What Has Been Happening in the Crypto Industry?
While the digital medium of exchange, cryptocurrency, is created and stored electronically on the blockchain, the most recognized form of it is Bitcoin. Bitcoin has undergone a major historical event in the first quarter of this year. This was when the block reward for bitcoin miners was decreased from 6.25 BTC per mined block to 3.125 BTC per mined block on April 19, also known as the halving event. This halving event is pre-planned and takes place once every four years to slow the pace at which new coins are created. Through this reduced supply of the coin, the concept of Bitcoin as digital gold remains maintained. Previously, Bitcoin halved in 2012, 2016, and 2020.
The impact of this event was most profound for Bitcoin miners who saw their profitability drop due to a reduction in block rewards. Miners who had access to reliable and inexpensive power sources were believed to better deal with the challenges after the Bitcoin halving event. The hashrate is important to be studied in this regard since it is the speed at which a computer can perform hashing computations. Thus, a higher hash rate means higher chances of successfully mining a block and receiving the block reward, a certain amount of BTC received as a reward after validating a new block of transactions. In the latter part of this article, we will be talking about how some of the most efficient miners stayed resilient after this reward halving. To read more about the Bitcoin companies and their response to the macro environment in 2024, you can go through our recent piece on the 15 Biggest Publicly Traded Bitcoin Companies.
The Ongoing US Politics: An Opportunity for the Crypto Industry?
Under the current political dynamics in the US, the crypto industry sees an opportunity with ongoing talks about how Vice President Kamala Harris now running for President, could probably be in support of emerging tech such as the crypto industry. However, the critics oppose the view. In an interview with CNBC, Dennis Kelleher, CEO of Better Markets, emphasized that Harris should not accept pressure from the crypto industry. He mentions the foremost reason behind this as crypto not being among the top concerns of Americans. Among the 88% of Americans who have heard of crypto, a majority 75% of them have hostile views of it. Furthermore, between 61% and 75% of the voters in six of the key swing states view crypto negatively.
Secondly, crypto lacks any legitimate and socially acceptable use with its least harmful use being speculation and gambling. Thirdly, Vice President Harris has been an advocate of investor and consumer protection so she should support the core elements of the financial system, in the views of Kelleher. Lastly, crypto has been discriminating against people of color as they tend to lose money relative to the traditional financial system. While Kelleher believes that innovation and investing in technology are fundamental to the US economy, he states that all financial products need to be federally regulated while the crypto industry seeks special treatment regarding this form of regulation.
Simultaneously, crypto is being embraced through a boost of innovation and forward-thinking as evident from the state of Wyoming which looks forward to launching the country’s first US government-issued stablecoin. The state governor Mark Gordon sees a bright future for digital assets and thinks that the entrepreneurial state could make a difference. Another development in the market was Bitcoin moving 1.84% higher and surpassing the $61,000 mark after Fed Chairman Powell signaled an adjustment to the US monetary policy after months of soaring interest rates. With the most anticipated interest rate cuts on the horizon, the crypto industry will have to wait and watch how the circumstances unfold.
With that being said, let’s move to the 7 best bitcoin and blockchain stocks to buy according to analysts.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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CleanSpark, Inc. (NASDAQ:CLSK)
Average Upside Potential: 86.39%
CleanSpark, Inc. (NASDAQ:CLSK) is a Bitcoin miner that owns and operates multiple data centers that primarily run on low-carbon power. The company uses a sustainable energy mix comprising nuclear, hydroelectric, solar, and wind to mine Bitcoin. Therefore, CleanSpark engages in developing infrastructure for Bitcoin in a responsible manner.
CleanSpark has one of the highest current hashrates of 22.3 exahashes per second among other Bitcoin mining companies. The Bitcoin miner has a proven track record of strategic growth as evidenced by its 129% year-over-year revenue growth and 204% year-over-year hashrate growth from 2023’s third quarter to 2024’s third quarter. It closed the fiscal third quarter of 2024 with a 24% increase in hashrate during the quarter. While the firm is expanding into new states including Tennessee and Wyoming, it is committed to replacing a substantial portion of its fleet before the miners approach the end of their originally expected life cycle thereby positioning itself as the most efficient large-scale publicly traded Bitcoin miner. This prominent industry position in the words of the firm’s CFO Gary Vecchiarelli is evident from an excerpt from the firm’s recent investor presentation:
“By running at max operating power when electricity costs are lowest, and optimizing when electricity costs are higher, we have been able to achieve some of the best margins in the industry, all while maintaining one of the highest realized hashrates in North America.”
Currently, CleanSpark is trading at 23 times its forward earnings, a discount of 3.28% to the sector which deems the stock a cheap investment. As a key player in Bitcoin mining with a clean energy base, the firm has an impressive growth and efficiency record and an average upside potential of 86.39%.
Overall, CLSK ranks 4th on our list of the best Bitcoin and blockchain stocks to buy. While we acknowledge the potential of CLSK as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than CLSK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock
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Disclosure: None. This article is originally published at Insider Monkey.
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