On Monday, Jefferies, a global investment banking firm, increased its price target on Argo Blockchain ADR (NASDAQ: ARBK) shares to $1.50 from the previous $1.20. The firm maintained its Hold rating on the stock. The adjustment reflects the recent surge in Bitcoin (BTC) prices, which the firm believes has improved the profitability of BTC mining operations, particularly in February.
According to the investment firm, the profitability of BTC mining improved month-over-month in February due to a 15% increase in BTC prices. This was coupled with a slower 9% increase in the network hash rate. Despite the network hash rate nearly doubling compared to the same period last year, public BTC miners have seen a reduction in market share.
The analyst from Jefferies noted that the upcoming Bitcoin halving event could serve as a positive catalyst for miners with modern ASIC fleets and access to low-cost power. This event is expected to impact the dynamics of the mining industry by reducing the reward for mining new blocks, thus potentially increasing the value of BTC for miners with efficient operations.
Furthermore, the analyst mentioned Marathon Digital (NASDAQ:MARA) Holdings' strategy of buying out its hosting partners as a defensive maneuver in anticipation of the Bitcoin halving. Jefferies supports this approach, suggesting it could be beneficial for the company in the face of the halving's effects on the mining landscape.
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