Market Data 
Bitcoin mining stocks have plummeted since the start of the year, and certain metrics suggest that many are still overvalued, according to industry tracker Power Mining Analysis.
According to the firm’s figures, the price-to-book ratio of most publicly traded miners still exceeds 1.0, meaning their market capitalization exceeds their net asset value. Examples include a ratio of 2.51 for Marathon Digital (MARA) and 3.15 for Cipher Mining (CIFR).
CleanSpark (CLSK), which is up 33% this year in a notable outperformance of other miners, has the largest price-to-book ratio at 3.59, Power Mining said. Meanwhile, even miners that have substantially fallen this year, like IREN (-36%) and RIOT (-47%), have roughly neutral ratios of 1.00 and 1.15, respectively.
Yesterdays #PowerMiningAnalysis podcast looked at the valuations of some of the largest #BTC miners publicly traded in North America.
The table below highlights two key ratios:
1. Price to Book Ratio – this measures a company’s market value relative to its net asset value,… pic.twitter.com/qJBhsQYaHV
— Anthony P⭕️wer (@cazenove_uk) April 17, 2024
A high ratio suggests that a company’s stock is irrationally overheated compared to its fundamental value. That said, it could also mean that market participants are confident in the company’s future earning potential compared to rivals and are pricing that in accordingly.
Price-to-book isn’t the only way to value a business: Power Mining also examines each miner’s “cost value of hash rate.” This measures how much hash rate the company produces relative to its “enterprise value”—the sum of its market cap and debts minus its cash and cash equivalents.
According to Power Mining, BitDigital (BTBT) is a clear winner on that measure at a meager $27.05 per current terahash per second (TH/s). However, BitDigital is also the most undervalued miner when factoring in future hash rate projections, in which case that ratio drops to $12.44.
Meanwhile, CLSK once again appears highly overvalued, placing last among twelve at $150.62 for its current hash rate and third last at $80.02 for the future hash rate.
“It should be noted that the enterprise value takes no account of additional revenue streams from other business segments, such as HPC and Hosting,” Compass wrote. “It should also be noted that metrics/ratios should never be taken in isolation.”
Meanwhile, financial broker Bernstein believes Bitcoin miners are an obvious buy right now, despite the cold metrics. Stock in such firms is merely declining over fears of the upcoming Bitcoin halving, the firm argues, asserting that they will rebound once the halving passes at the end of the week.
“Historically, Bitcoin price breakout has always followed the halving event and sometimes a few months after halving,” wrote analysts Gautam Chhugani and Mahika Sapra in a Wednesday research report.
Bernstein picked CLSK and RIOT as “outperform” rated stocks, believing the market will reward these firms for being leaders in terms of self-ming hash rate.
Edited by Ryan Ozawa.
