Marathon, Riot among most overvalued Bitcoin mining stocks: Report

Bitcoin (BTC) mining heavyweights Marathon Digital and Riot Platforms are amongst the most misestimated crypto mining companies relative to their rivals, states MinerMetrics founder and analyst Jaran Mellerud.The crucial metric backing Melleruds claim is enterprise value-to-sales ratio– measuring a businesss worth to its sales revenue. The greater the ratio, the more misestimated a business is.The miners with the highest EV/S ratios are Cipher at 7.8, Marathon and Iris Energy each at 5.6 and Riot at 5.5, according to a Nov. 3 report by Mellerud.Mining stocks appraisal in terms of EV-to-Sales ratio. Source: MinerMetricsMellerud attributed the heavyweights high EV/S ratios to receiving more institutional attention from the likes of BlackRock.” These companies have traditionally been preferred among institutional investors like Blackrock and Vanguard, providing superior access to capital and higher valuations like the rest of the market.” Mellerud told Cointelegraph in the coming months he expects investors to begin designating to other gamers “which could even out the valuation discrepancies between these stocks,” he said.He recommended there are better-priced opportunities with lower EV/S ratios that might be profited from.” There exist immense evaluation inconsistencies in the Bitcoin mining sector that worth financiers can take benefit of.” Riots high EV-to-Hashrate ratio at 156 is another indication pointing towards its overvaluation, states Mellerud.Mining stocks appraisal in regards to EV-to-Hashrate ratio. Source: MinerMetricsMellerud, formerly an expert at Bitcoin miner Luxor Technology, noted Riot has “massive growth” priced in as its building its a gigawatt website and awaits the shipment of 33,000 MicroBT machines in early 2024.” In addition, Riot has numerous service lines that are not shown in its self-mining hashrate, meaning we should take care in drawing any assessment conclusions from its high EV-to-Hashrate ratio,” Mellerud added.The Bitcoin mining sector has rebounded strongly in 2023, led by Marathon (MARA) and Riot (RIOT), whose share prices have actually respectively increased 170% and 228%, according to Google Finance.The mining stocks have actually outshined Bitcoin over the very same time, which has gotten 113% year-to-date according to Cointelegraph Markets Pro data.Related: Bitcoin mining can assist decrease up to 8% of global emissions: Report Not every mining expert believes Bitcoin mining stocks will continue to rise.Cubic Analytics founder Caleb Franzen noted Bitcoin currently reached its year-to-date peak cost, while the top mining stocks are still over 75% off year-to-date price highs.Franzen thought about whether Bitcoin mining companies will quickly require to become twice as efficient in light of the upcoming Bitcoin cutting in half event.” If block rewards are cut in half, the price of BTC would require to double post-halving in order for their organization to be simply as sustainable as it was pre-halving.” Marathon has the biggest Bitcoin holdings amongst mining companies with 13,726 BTC, worth $486.1 million. Hut 8, Riot and CleanSpark follow with particular holdings of 9,366 BTC, 7,309 BTC and 2,240 BTC.Magazine: How to safeguard your crypto in a volatile market: Bitcoin OGs and professionals weigh