Blockworks

Riot Platforms, a Texas-based company best known for running one of the largest bitcoin mining operations in North America, just won rare back-to-back upgrades from major Wall Street banks. 



Reporting from Coindesk <a href="https://www.coindesk.com/markets/2025/09/26/riot-gets-double-upgrade-on-ai-pivot-as-jpmorgan-citi-hike-targets">indicates</a> that JPMorgan and Citigroup raised their ratings on Riot’s stock, saying its push into artificial intelligence (AI) could give it a critical edge over competitors.



Bitcoin mining involves using massive amounts of electricity to power computers that secure the Bitcoin network and earn block rewards in the form of newly distributed coins. But every four years, those rewards are cut in half. After the latest halving in 2024, many miners are struggling to stay profitable.



Riot is responding by retooling its giant data centers to support high-performance computing (HPC) and cloud services — the same type of infrastructure needed to train and run AI systems.&nbsp;



Analysts at JPMorgan said there’s a 50% chance Riot, Cipher and IREN could secure near-term HPC hosting contracts, citing Core Scientific’s $3.7 billion CoreWeave deal as a benchmark. While JPMorgan downgraded IREN overall, the bank still assigns it the same probability of winning AI-related business as Riot and Cipher.



On the back of this shift, JPMorgan boosted Riot’s price target to $19, while Citi raised its target to $24. Shares of Riot dipped slightly on Friday but still outperformed a sector-wide selloff. By contrast, JPMorgan downgraded rivals IREN and CleanSpark, citing weaker prospects, while leaving a buy rating on Cipher Mining and trimming Marathon Digital’s target.



The moves highlight a broader industry divide: miners sticking solely to bitcoin versus those betting their future on AI and cloud computing.



This is a developing story.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



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JP Morgan

JPMorgan, Citi upgrade Riot Platforms on AI shift

Jacquelyn Melinek

<div id="highlights-block_621d0bb093c84" class="highlights">
 <ul>
 <li>This investment highlights the significance financial institutions investing in crypto technology to mitigate associated risks, Esteban Castaño, co-founder and CEO of TRM, said to Blockworks</li>
 <li>TRM’s vision aligns with JPMorgan’s ambitions to build compliant and secure blockchain products, Umar Farooq, CEO of Onyx by JPMorgan, said in a statement</li>
 </ul>
 
</div>



Blockchain intelligence company TRM Labs has added JPMorgan Chase &amp; Co. to its list of investors after the bank announced its strategic investment on Monday.



The total amount invested by JPMorgan was not disclosed, and neither organization was available for immediate comment.



TRM provides blockchain intelligence to help traditional financial institutions as well as crypto-focused businesses and public agencies analyze and manage crypto-related fraud and crime.



“I think it shows that financial institutions are not investing in just crypto and potential use cases but the technology to mitigate any associated risks,” Esteban Castaño, co-founder and CEO of <a href="https://www.trmlabs.com" target="_blank" rel="noreferrer noopener">TRM</a>, said to Blockworks. “It reflects the long term mindedness of the industry and figuring out what’s the right answer for crypto in terms of risk management, trust and safety.”



The company was founded in 2017 and recently closed its <a href="https://cms.blockworks.co/trm-labs-lands-60-million-series-b-round/" target="_blank" rel="noreferrer noopener">$60 million Series B</a> in December 2021. The round at the time was led by Tiger Global and included other major investors and financial players including American Express’ Amex Ventures, Citi Ventures, PayPal Ventures, Visal, Block <a href="https://cms.blockworks.co/jack-dorseys-square-to-change-its-name-to-block/" target="_blank" rel="noreferrer noopener">(formerly Square Inc.</a>) and Jump Capital.



“People often cite that financial institutions are ‘here’ and I think that’s more true now than ever before,” Castaño said. “Today we see countless financial institutions that have tangible projects in flight for crypto related projects and services and they’re making investments in risk management infrastructure so those products can be successful, trusted and safe for consumers.”



JPMorgan has spent the last six years exploring the possibilities and applicability of blockchain technology, Umar Farooq, CEO of Onyx by JPMorgan, said in a statement. TRM’s vision aligns with JPMorgan’s ambitions to build compliant and secure blockchain products, Farooq added.



Earlier this month, JPMorgan took a jump into the metaverse after launching a virtual lounge in the popular blockchain-based metaverse Decentraland. The “Onyx lounge” was unveiled with a report from the bank outlining metaverse-related growth opportunities, Blockworks previously <a href="https://cms.blockworks.co/jpmorgan-enters-the-metaverse-with-virtual-decentraland-lounge/" target="_blank" rel="noreferrer noopener">reported</a>.



Separately, two JPMorgan research analysts Kenneth Worthington and Reginald Smith said in a report they see 2022 potentially as “the year of the blockchain bridge…or the year of financial tokenization.” The analysts also said they expect the evolution of crypto markets to accelerate this year, particularly for financial services, Blockworks <a href="https://cms.blockworks.co/jpmorgan-2022-could-be-year-of-the-blockchain-bridge/" target="_blank" rel="noreferrer noopener">reported</a> in January.



“Trust and safety is a prerequisite for crypto to be successful in the long run,” Castaño said. “Blockchain intelligence builds greater trust and safety and enables crypto to become the next dominant financial system of the world.”



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Esteban Castano

JPMorgan Chase Strategically Invests in Blockchain-focused TRM Labs

Morgan Chittum

<div id="highlights-block_620bfabd3a809" class="highlights">
 <ul>
 <li>Analysts from the bank predict in-game ad spending will reach $18.4 billion by 2027</li>
 <li>The average price of virtual land doubled from $6,000 to $12,000 in six months last year, according to JPMorgan</li>
 </ul>
 
</div>



JPMorgan took a big step into the metaverse Tuesday, jumping into the nascent space with a virtual lounge in popular blockchain-based world Decentraland.



The “Onyx lounge” was unveiled along with a <a href="https://www.jpmorgan.com/content/dam/jpm/treasury-services/documents/opportunities-in-the-metaverse.pdf" target="_blank" rel="noreferrer noopener">report</a> from the bank outlining metaverse-related growth opportunities for businesses and causes for its “explosive interest.”



“When you think about the economics of the metaverse — or metanomics — there are opportunities in almost every market area.&#8221; the bank wrote. “We are not here to suggest the metaverse, as we know it today, will take over all human interactions, but rather, to explore the many exciting opportunities it presents for consumers and brands alike.”



The metaverse, JPMorgan said, has a market opportunity of $1 trillion in yearly revenue, as creators tap Web3 to monetize their work in new ways.



“This democratic ownership economy coupled with the possibility of interoperability, could unlock immense economic opportunities, whereby digital goods and services are no longer captive to a singular gaming platform or brand,” according to the report.



The bank cited household names such as PWC, Walmart, Nike, Verizon, Gap, Adidas, Hulu and Atari as early adopters and investors in the blockchain economy.



“Business leaders and boardrooms around the world are now asking themselves, ‘What is my metaverse strategy? What am I supposed to be doing in the metaverse? What is the metaverse anyway?’” the note said.



The average price of virtual land has doubled from $6,000 to $12,000 in six months last year, according to data from four popular metaverse platforms. The bank predicts in-game advertising spending will reach $18.4 billion by 2027.



Although the metaverse has evolved “very quickly,” and it is “difficult to base a business strategy on such a dynamic space,” JPMorgan said that the risk of “being left behind is worth the incremental investment needed to get started.”



JPMorgan’s metaverse move follows Morgan Stanley’s related <a href="https://cms.blockworks.co/morgan-stanley-sees-8-trillion-metaverse-market-eventually/" target="_blank" rel="noreferrer noopener">note</a> to clients last month. 



Analysts at the bank predict the metaverse’s initial total addressable market (TAM) in China will be roughly $4 trillion, as it replaces the mobile internet with a more “immersive experience.” Once the metaverse begins “disrupting offline activity,” such as real-estate showings, vehicle test-drives and education, that figure is projected to soar to $8 trillion.



“We expect the metaverse TAM to be expansive and go beyond the current online consumption market, which is mainly dominated by e-commerce and online entertainment spending,” the note said.



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cryptocurrency

JPMorgan Enters the Metaverse With Virtual Decentraland Lounge

Casey Wagner

<div id="highlights-block_6203ef1a214bd" class="highlights">
 <ul>
 <li>Bitcoin’s fair value is $38,000, according to strategists from JPMorgan</li>
 <li>Crypto advocates say that bitcoin’s volatility is an advantage</li>
 </ul>
 
</div>





Based on bitcoin’s volatility ratio to gold, the digital currency is currently overvalued by about 13%, according to a group of JPMorgan strategists.



Bitcoin today is roughly four times as volatile as gold, putting its fair value at $38,000, the strategists, led by Nikolaos Panigirtzoglou, said in a report released Tuesday.



“The biggest challenge for bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption,” the report said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“In an upside scenario where there is more normalization in vol to around 3x, the fair value would be around $50k.”</blockquote>



Strategists maintain a higher long term projection for bitcoin, estimating the digital currency will hit $150,000. This is up from analysts’ previous estimate of $146,000 a year ago.&nbsp;



Crypto advocates argue that JPMorgan strategists are misconstruing bitcoin’s volatility as a weakness.



“The major flaw in JPMorgan&#8217;s argument against bitcoin’s resilience is that volatility will hinder broader adoption,” Leah Wald, CEO at digital asset manager Valkyrie Investments, said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“This stance shows a failure to understand what brings many people and institutions to digital assets and cryptocurrencies in the first place.”</blockquote>



The report comes as the <a href="https://cms.blockworks.co/fed-moves-to-raise-interest-rates/" target="_blank" rel="noreferrer noopener">correlation</a> between cryptocurrencies and equities continues to tighten, a trend that threatens bitcoin’s historic status as an uncorrelated asset.



Bitcoin’s investment case is that it is a hedge against other asset classes, Greg Foss, executive director of strategic initiatives at Validus Power Corp, said. The correlation to equities will not last, he added.



“Bitcoin eventually will be viewed as insurance and, therefore, will de-correlate from the rest of the assets,” Foss said.



Data from CryptoQuant <a href="https://twitter.com/cryptoquant_com/status/1489168864462008322" target="_blank" rel="noreferrer noopener">suggests</a> bitcoin is currently undervalued. As of Wednesday, bitcoin’s network-value-to-transactions (NVT) ratio — a commonly-used fundamental metric — reached a 10-year low on a 30-day exponential moving average basis.  



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="661" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Screenshot-2022-02-09-at-17.48.59-1024x661.png" alt="" class="wp-image-17109" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Screenshot-2022-02-09-at-17.48.59-1024x661.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Screenshot-2022-02-09-at-17.48.59-1024x661.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Screenshot-2022-02-09-at-17.48.59-1024x661.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Screenshot-2022-02-09-at-17.48.59-1024x661.png?w=398 398w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Screenshot-2022-02-09-at-17.48.59-1024x661.png?w=404 404w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Screenshot-2022-02-09-at-17.48.59-1024x661.png?w=339 339w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Screenshot-2022-02-09-at-17.48.59-1024x661.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Screenshot-2022-02-09-at-17.48.59-1024x661.png?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Screenshot-2022-02-09-at-17.48.59-1024x661.png?w=1033 1033w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption>Network Value to Transactions (NVT) is the ratio of market capitalization divided by transferred volume that helps to detect whether coins are overvalued or undervalued; Source: <a href="https://cryptoquant.com/asset/btc/chart/network-indicator/nvt-ratio" target="_blank" rel="noreferrer noopener">CryptoQuant.com</a></figcaption></figure>



Although the market is still reeling from the recent sell-off, Wald is confident bitcoin will rally soon.&nbsp;



“When looking at metrics, including active wallet addresses, which are still well above where they were during crypto winter, the amount of bitcoin moving off exchanges, which continues to rise and is often an indicator that savvy traders believe the market will move higher, and the seemingly endless parade of venture investments being announced into the space — we remain firmly bullish,” she said.



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Bitcoin

JPMorgan Says Bitcoin is 13% Overvalued

<div id="highlights-block_60ec9a2d526bc" class="highlights">
 <ul>
 <li>90% of bitcoin hasn’t changed hands in around 12 months </li>
 <li>Daily payment activity in El Salvador could represent around 4% of on-chain transaction volume</li>
 </ul>
 
</div>



El Salvador’s recent approval of bitcoin as a legal tender could create issues for the Central American nation’s economy and the digital asset, a recent report by JPMorgan said.



JPMorgan cited illiquidity, high volatility, and U.S. dollar conversion as obstacles for bitcoin as a medium of exchange, according to the document, which was first reported by <a href="https://www.bloomberg.com/news/articles/2021-07-11/jpmorgan-says-el-salvador-move-could-strain-bitcoin-blockchain?sref=3REHEaVI">Bloomberg</a>.&nbsp;



The El Salvadoran Congress said it would adopt bitcoin as a standardized currency back in June, becoming the first country to ever do so. The “Bitcoin Law” was <a href="https://cms.blockworks.co/el-salvador-approves-bitcoin-as-legal-tender-in-supermajority/">passed</a> in a super majority and will come into effect on September 7.



The report questioned the illiquidities tied to the digital currency, citing that 90% of bitcoin has not changed hands in around 12 months.&nbsp;



“Daily payment activity in El Salvador would represent ~4% of recent on-chain transaction volume and more than 1% of the total value of tokens which have been transferred between wallets in the past year,” the report indicated.



Bitcoin’s conversion to the dollar could also “cannibalize onshore dollar liquidity” and threaten fiscal stability, the report said.&nbsp;



A <a href="https://www.reuters.com/technology/big-salvadoran-majority-skeptical-bitcoin-standard-currency-2021-07-08/">survey</a> by Disruptiva suggests that many residents of the country are wary of the move. Out of the 1,233 respondents, around 65% of those polled would not want to be paid in bitcoin and 46% said they knew “nothing” about the digital asset.&nbsp;



&#8220;This is a risky bet on digital transformation,&#8221; said Oscar Picardo, head of Disruptiva&#8217;s institute of science, technology and innovation, when results of the survey were <a href="https://www.reuters.com/technology/big-salvadoran-majority-skeptical-bitcoin-standard-currency-2021-07-08/">announced</a>.



<h3 class="wp-block-heading">In defense of El Salvador&#8217;s bitcoin plans</h3>



Kevin Kang, founding principal of BKCoin Capital, said that El Salvador chose bitcoin because of its size and decentralized, public nature.&nbsp;



“As the Fed created 25% of all M2 supply in 2020 alone, the dollar is going to devalue,” Kang said in a note to Blockworks. “It&#8217;s a question of when, not if. Since El Salvador isn&#8217;t getting the economic benefits of piggybacking off of the US growth anymore, Bitcoin alternative truly gives them the power when exchanging value that doesn&#8217;t involve having to rely on another nation or currency.”



The Lightning Network could make micropayments more efficient, easing concerns over liquidity, Kang said.&nbsp;



“Bitcoin at its current form does not make it [a] practical form of retail payments as a single Bitcoin transaction fee alone would be 1% of a Salvadoran&#8217;s average annual income,” Kang added. “However, Lightning network makes micropayments more efficient, which is designed to speed up transaction processing times as well as decreasing the transaction costs.”