BitMine stock has lost momentum this week as the broader crypto market weakened. BMNR dropped to $26.43, a few points below last month’s high of $28.76. This softness could be the calm before the storm, with a larger move possible in the coming weeks.
BitMine stock may benefit as it nears Ethereum target
BMNR stock will be in the spotlight this month, possibly as it concludes its Ethereum buying process. The company now holds over 6 million tokens and has staked over 5.1 million tokens. It is 98% of the way of hitting its target.
Completing these purchases will be important because it will end the pace of dilution that has seen its outstanding shares jump in the last 15 months.
At the same time, it will help the company to intensify its ETH staking. It has now staked over 5 million tokens and is earning, with Tom Lee estimating that its annualized staking revenue is worth over $358 million. Eventually, he expects that the company will make over $424 million when it stakes all its tokens.
These numbers are important because of BitMine’s business model. Unlike Strategy, which has a software business with employees, BitMine has about 3 workers. This means that most of the staking revenue will be profit.
Ethereum price may surge in October
The other bullish catalyst for BitMine is that Ethereum may surge in October. In a report today, Citigroup hiked its target for ETH price to $3,028 from the previous $2,240.
The company noted that flows into the crypto market will continue, albeit at a slower pace. This inflow will happen as money managers start to gradually allocate cash to ETH and other assets.
Indeed, data shows that spot Ethereum ETF inflows jumped by $832 million in September after adding $1.8 billion last month. These funds have had inflows in the last three months, a move that has coincided with the weakness in the artificial intelligence market.
Technicals are highly supportive. It has formed a bullish flag pattern and retested its upper side. A break-and-retest pattern is one of the most common continuation signs in technical analysis.
Ethereum price also formed a golden cross pattern, which happens when the 50-day and 200-day Exponential Moving Averages cross each other. This means that the coin may jump to $3,000, which would value its Ethereum holdings at $18 billion.
ETH price chart | Source: TradingView
BitMine stock has bullish technicals
The daily chart shows that BitMine stock has some highly bullish technicals. It has just formed a golden cross pattern and is in the process of forming a bullish flag pattern. A bullish flag is made up of a vertical line and a descending channel.
BitMine stock remains above the ascending trendline that links the lowest swings since June 30th. It also sits above the Supertrend indicator. Therefore, the stock may continue rising as bulls target the psychological level of $35.
BMNR stock chart | Source: TradingView
BitMine is a bargain
More data shows that BitMine is trading at bargain prices, especially when considering the sum of parts. This is an approach where one looks at a company’s segments and compares with the valuation.
In this case, the company has a market capitalization of $15.9 billion and has no debt. In contrast, its Ethereum holdings are valued at $16.1 billion. Its crypto holdings, together with cash and Moonshots have a valuation of $17.2 billion, higher than its current valuation.
The post Top reasons why Tom Lee’s BitMine stock may soar in October appeared first on Invezz
