An unusual surge in demand is currently being stared at by the disk-drive industry brought about by the need to purchase storage devices that can be used to farm the new cryptocurrency Chia.
While most cryptocurrency mining depends on the “proof of work” model where miners solve complex mathematical problems to earn coins such as bitcoin, chia uses “proof of space and time” model that is tied to storage capacity dedicated to be used on the blockchain rather than in computation of algorithms.
With chia, currently priced at $980.92 by CoinGecko, leaning on an approach that is less energy-intensive in creating cryptocurrency, some players in the crypto market seem to be intrigued by the new digital asset, owing to the fact that there is a significant increase in demand for high-capacity disk drives.
Expectations for Western Digital and Seagate stock prices rise
Wamsi Mohan, a BofA Global Research analyst, recently raised his own stock price targets for both Seagate and Western Digital, both heavyweights in the disk-drive market.
From $107, Mohan raised his price target for Seagate stock to $120. Meanwhile, his new expectations for Western Digital are $90, slightly higher than the original $80 target. As for buy ratings, the analyst maintained his ratings for both disk-drive manufacturers.
Western Digital shares increased 10% when its chia-driven rally started last week while Seagate recorded a 16% surge.
Allocations increase too
Mohan also noticed there is an increase of more than 2,000% in a month to the storage allocated to the chia network which now stands at 8 Exabyte.
For the March quarter, Seagate has shipped 140 Exabyte of storage devices while Western Digital’s production increased by around 9 Exabyte over the same period.
There is also a significant increase in prices, with 14 Terabyte drives’ prices having up to 74% increase and 16 Terabyte drives recording spikes of up to 61%.
Image courtesy of Cointelegraph News/YouTube