TD Cuts Price Target on Bitcoin Giant Strategy, Calls Ethereum Treasury Sharplink a ‘Buy’

TD Cowen analysts initiated coverage of Sharplink with a “buy” rating on Thursday, while reducing the investment bank’s price target for a bitcoin long strategy.

The analysts, led by Lance Vitanza, set a $16 price target for Sharplink shares, which traded at about $6.42 in after-hours trading, according to Yahoo Finance. The company’s stock price has fallen by 62% over the past six months.

Unlike cryptocurrency buying companies dedicated to BitcoinSharplink has positioned itself as an operating company capable of growing its inventory of digital assets through… StakingIt is the process through which entities involved in the transaction validation process can earn Ethereum Rewards.

Although several Ethereum ETFs have debuted in the United States that offer staking services, TD analysts have assumed that the company will achieve a relative “superior return” based on the fees the ETFs charge and liquidity constraints on staking among asset managers.

Sharplink’s ability to increase the amount of Ethereum it holds per share should lead the company to outperform Ethereum ETFs that offer staking in the context of a favorable price environment, the analyst wrote. They added that if the price of Ethereum remains low, the company’s revenue should be able to “fully cover operating costs.”

Last month, Sharplink reported that revenue from stakes jumped 50% quarter-on-quarter to $15.3 million from $10.3 million. At the time, the company generated 14,500 Ethereum worth $9.4 million from staking. Meanwhile, the company revealed an annual loss of $734 million, driven by a decline in the value of its Ethereum holdings in the second half of the year.

Consensys CEO and Ethereum co-founder Joe Lubin, who serves as Chairman of Sharplink, said the company is positioned to act as a bridge between traditional public markets and Ethereum. (Disclosure: Consensys is one of… 22 investors In an editorially independent journal Decryption.)

Meanwhile, TD analysts cut their price target for Strategy, which owns more than $55 billion worth of bitcoin, to $350 — but reiterated a “buy” rating for the company.

On Thursday, Strategy’s stock price rose to nearly $129, according to Yahoo Finance. Earlier this year, the investment bank cut its price target for the Tysons Corner, Virginia-based company to $440 from $550.

TD Cowen analysts said the updated price target reflects a lower multiple of the company’s expected “$BTC gains.” A Bitcoin buyer tracks a key performance indicator, or KPI, as dollar value is added to its Bitcoin holdings through acquisitions. Furthermore, the analysts wrote that the target price reflects lower expectations for future Bitcoin prices.