We recently published a list of Top 7 Bitcoin and Blockchain Stocks to Buy According to AnalystsIn this article, we will examine how Iris Energy Limited (NASDAQ:IREN) stands relative to other Bitcoin and blockchain stocks.
What happened in the crypto industry?
Although the digital medium of exchange, cryptocurrency, is created and stored electronically on the blockchain, the most recognized form of it is Bitcoin. Bitcoin experienced a major historical event during the first quarter of this year. This was when the block reward for Bitcoin miners was reduced 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 planned in advance and occurs once every four years to slow down the rate at which new coins are created. With this reduced supply of the coin, the concept of Bitcoin as digital gold remains intact. Previously, Bitcoin was halved in 2012, 2016, and 2020.
The impact of this event was most profound for Bitcoin miners who saw their profitability plummet due to a reduction in block rewards. It was thought that miners who had access to reliable and inexpensive energy sources were better positioned to meet the challenges following the Bitcoin halving event. Hash rate is important to study in this regard because it is the speed at which a computer can perform hashing calculations. Thus, a higher hash rate means a greater chance 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 last part of this article, we will talk about how some of the most efficient miners remained resilient after this block reward halving. To learn more about Bitcoin companies and their response to the macroeconomic environment in 2024, you can check out our recent article on the 15 largest publicly traded Bitcoin companies.
Current Politics in the United States: An Opportunity for the Crypto Industry?
In the current political climate in the United States, the cryptocurrency industry sees an opportunity in the ongoing discussions about how Vice President Kamala Harris, who is now running for president, could likely support emerging technologies such as the cryptocurrency industry. However, critics are opposing this view. In an interview with CNBC, Dennis Kelleher, CEO of Better Markets, stressed that Harris should not accept pressure from the cryptocurrency industry. He cites the main reason behind this as the fact that cryptocurrencies are not among the top concerns of Americans. Among the 88% of Americans who have heard of cryptocurrencies, a majority (75%) of them have a hostile opinion towards them. Furthermore, between 61% and 75% of voters in six of the key swing states have a negative opinion of cryptocurrencies.
Second, cryptocurrencies have no legitimate and socially acceptable uses, with their least harmful uses being speculation and gambling. Third, Vice President Harris has championed investor and consumer protection, so she should support the fundamental elements of the financial system, according to Kelleher. Finally, cryptocurrencies have discriminated against people of color, as they tend to lose money compared to the traditional financial system. While Kelleher believes that innovation and investment in technology are fundamental to the American economy, he argues that all financial products should be regulated at the federal level, while the cryptocurrency industry is seeking special treatment regarding this form of regulation.
Meanwhile, cryptocurrencies are being adopted thanks to a surge in innovation and forward thinking, as evidenced by the state of Wyoming, which is hoping to launch the first U.S. government-issued stablecoin. The state’s governor, Mark Gordon, sees a bright future for digital assets and believes the entrepreneurial state could make a difference. In other market action, Bitcoin gained 1.84% and surpassed the $61,000 mark after Fed Chair Powell signaled an adjustment to U.S. monetary policy after months of skyrocketing interest rates. With the most anticipated interest rate cuts on the horizon, the cryptocurrency industry will have to wait and see how things play out.
That being said, let’s move on to the 7 best Bitcoin and blockchain stocks to buy according to analysts.
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A table full of technology, with bitcoin mining rigs and a laptop displaying a financial graph.
Iris Energy Limited (NASDAQ:IREN)
Average upside potential: 98.76%
Iris Energy Limited (NASDAQ:IREN) owns, builds, and operates data centers and power infrastructure to mine Bitcoin. The company’s business model is built on sustainable Bitcoin mining. Founders Dan and Will saw an opportunity to capitalize on excess renewable energy and support energy grids while having an early conviction in Bitcoin. As a sustainable Bitcoin miner, the company’s sites are powered by 100% renewable energy.
Iris Energy Limited holds a distinctive position in an emerging market by using low-cost surplus renewable energy to keep costs down, support communities and solve energy market challenges. It has a robust portfolio of 260 MW of operational data centres and plans to expand to 510 MW in 2024. Most recently, in July, the company secured an additional 150 MW of immediately available power capacity at its Childress site, bringing its total secured grid-connected power capacity to 2,310 MW.
Among its peers, Iris qualifies as a large-scale miner with its Bitcoin mining hash rate currently at 10 exahashes per second, which was a milestone achieved ahead of schedule and is on track to reach 30 exahashes per second by the last quarter of 2024, demonstrating the potential for future growth. While Bitcoin mining provides the company with a foundation for continued growth, it has diversified its revenue base through AI cloud services.
As a leading next-generation data center company powering the future of Bitcoin and AI, with a strong market position and continued growth potential, Iris Energy Limited (NASDAQ:IREN) is one of the top publicly traded Bitcoin miners and an attractive stock to buy according to analysts. As of August 26, the stock’s average upside potential is 98.76%.
Overall, IREN ranks 2nd on our list of the best Bitcoin and blockchain stocks to buy. While we recognize IREN’s potential as an investment, our conviction lies in the belief that some deeply undervalued AI stocks have more promise to deliver higher returns, and in a shorter time frame. If you’re looking for a deeply undervalued AI stock that has more promise than IREN but is trading at less than 5x earnings, check out our report on the cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.
