Blockchain under the microscope: What makes Cipher Mining a hidden gem?

The blockchain sector is currently experiencing significant developments that are shaping its future and expanding its applications in various fields. A notable trend is the growth in the area of Decentralized Finance (DeFi), which is revolutionizing traditional financial systems by enabling financial services directly via blockchain without intermediaries. Additionally, established financial institutions are increasingly relying on blockchain technology to enhance transparency and efficiency. The consulting firm The Business Research Company estimates the global market for blockchain in the financial sector to be USD 4.61 billion in 2023. According to forecasts, this market will grow at an annual rate of 40.4% from 2024 to 2028, reaching USD 27.69 billion. According to the Geography of Cryptocurrency Report by Chainalysis, an American blockchain analysis company, global crypto activity has been climbing to levels last seen during the crypto boom in 2021 since the end of 2023. A significant milestone occurred in January 2024 with the approval of the first Bitcoin ETFs by the US Securities and Exchange Commission, which led to an increase in Bitcoin trading, especially in affluent regions like North America and Western Europe. Janus Henderson, a global asset management firm, is developing a tokenized fund, the Anemoy Liquid Treasury Fund (LTF), in collaboration with Anemoy Limited and Centrifuge. This innovative fund combines the benefits of traditional ETFs with the advantages of blockchain: 24/7 trading, fast settlements, and increased transparency regarding the fund's holdings. Nick Cherney of Janus Henderson sees this as an opportunity to offer investment services more efficiently. Cipher Mining Inc. is among the most researched blockchain stocks and is proving to be a promising player in the field of industrial Bitcoin mining. The company recently acquired a new facility in West Texas, significantly increasing its capacity and allowing it to become active in the ERCOT market. The company's strategic investments and expansions, along with its stable financial position, suggest future profitability. Analysts are optimistic, and the stock is currently rated as a buy. The 1-year median target price is USD 7.00, representing a potential price increase of 70.73%. With a current valuation level of 5.86 times expected earnings, Cipher Mining appears to be an attractive investment. However, we remain convinced that AI stocks will offer higher returns in the long term.