Wall Street investment bank BTIG lowered its average 12-month price targets for bitcoin (BTC) miners by 65%, citing the decline in bitcoin prices as well as concerns about funding.

“While we expect BTC mining stocks to trade with the BTC price (just like most commodity stocks with the commodity), we believe the other driver of the miner’s underperformance to BTC are concerns around funding growth (think a lower BTC price means less capital for growth),” BTIG analyst Greg Lewis wrote in a research report on Friday.

BTIG’s Greg Lewis slashed his 12-month price target for mining stocks under coverage. (BTIG, CoinDesk)

Bitcoin miners have gotten battered this year, their stocks declining by more than 50% on average as the price of bitcoin slumped following last year’s bull run. The pain has been amplified for the miners as the Bitcoin network hashrate, along with mining difficulty, has risen near all-time highs this year, squeezing miner margins.

Such market conditions have led to investor concerns that miners won’t be able to raise the funds they need for growth because building a large-scale mining operation is very capital intensive. However, BTIG’s Lewis sees larger miners faring better at raising funds even in a bear market.

“In a flattish BTC price market, the ability to access capital has become that much more important (think financing for rigs, infrastructure, and BTC) and we expect large established miners to continue to have access to capital at the expense of smaller newer miners,” he wrote.

Lewis kept his buy rating on all four mining stocks he covers – Riot Blockchain (RIOT), CleanSpark (CLSK), Core Scientific (CORZ) and Marathon Digital (MARA) – and remains optimistic about the longer-term outlook for the industry. “Not surprisingly, our BTC mining price targets are highly sensitive to our BTC price estimate; hence a near-term BTC price of ~$40K points to 30%-40% upside to our price targets, while a BTC price of $50K points to 90%-100% upside to our price targets,” he wrote.


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