TD Cowen analysts initiated coverage of Sharplink with a “buy” rating on Thursday, while reducing the investment bank’s price target for Bitcoin-buying Strategy.
Although several Ethereum exchange-traded funds have debuted in the U.S. that offer staking, TD analysts posited that the firm will generate a comparatively “superior staking yield” based on the fees that the ETFs charge and liquidity constraints for staking among asset managers.
Sharplink’s ability to increase the amount of Ethereum that it holds per share should lead the company to outperform Ethereum ETFs that offer staking within the context of a favorable price environment, the analyst wrote. They added that, should Ethereum’s price remain depressed, the company’s staking revenue should be able to “fully cover operating costs.”
Last month, Sharplink reported that revenue from staking jumped 50% quarter-over-quarter to $15.3 million from $10.3 million. At the time, the company had generated 14,500 Ethereum worth $9.4 million from staking. Meanwhile, the company disclosed a full-year loss of $734 million, driven by a decrease in the value of its Ethereum holdings in the second half of the year.
Meanwhile, TD analysts trimmed their price target for Strategy, which holds over $55 billion worth of Bitcoin, to $350—but reiterated its "buy" rating for the firm.
TD Cowen analysts said the updated price target reflects a lower multiple on the company’s projected “BTC $ gain.” The Bitcoin-buying firm tracks the key performance indicator, or KPI, as the dollar value added to their Bitcoin holdings through acquisitions. What’s more, the analysts wrote that the price target reflects lower expectations of future Bitcoin prices.
