According to investment bank B. Riley, the cryptocurrency market has gained about 10% since November 20, with Ethereum-related Digital Asset Finance Corporation (DATCO) being one of the biggest beneficiaries.
Comments from the European Central Bank (ECB) reignited discussions about the dollar’s gradual shift to major reserve currency status and expectations of interest rate cuts, with the bank linking the gains to improving risk appetite.
Among the 25 DATCOs tracked by the bank, the group’s median mNAV has increased from 0.9x to about 1.0x since the last update, and the average has also increased from 0.9x to about 1.0x.
mNAV compares a company’s enterprise value (EV), which is the company’s market capitalization plus debt minus any cash, to the market value of its cryptocurrency holdings.
Analysts Fedor Shabalin and Nick Giles said in a report on Wednesday that the performance of cryptocurrency prices has tilted towards leveraged trends.
Since November 20, analysts expect Bitcoin to Funding firms are up about 20% on average, with Ethereum U.S. Treasuries were up about 28%, SOL Treasuries were up about 12%, and the Russell 2000 stock index was up about 7%. During the same period, the base coin gained 7% 13% and 4% respectively.
Analysts at the bank reiterated their view that DATCO’s rebound depends on two catalysts: stability in the broader cryptocurrency market and the company’s execution of ROE accretion plans to generate earnings.
With these two fundamentals in place, analysts are focusing on BitMine Immersion Technologies (BMNR), which has gained 51% since Nov. 20, while the stock has a buy rating of $47, while ETH-focused DATCO is up 28% and Russell 2000 is up 7%.
Within its coverage, the bank said it remains most constructive on BMNR and SharpLink Gaming (SBET), with a buy rating and $19 price target, describing them as the two largest ETH DATCOs pursuing staking and re-staking strategies.
B. Riley also pointed to FG Nexus (FGNX), Sequans Communications (SQNS) and Kindly MD (NAKA), which despite having operating businesses, trade at discounts to mNAV as valuable opportunities.
Read more: B. Riley Cuts Digital Asset Treasury Co. Price Target as Cryptocurrency Slump Intensifies