Wall Street firm says the best Bitcoin mining stocks are not American companies

Among the numerous publicly traded Bitcoin mining companies, Cantor Fitzgerald said one company in particular is being significantly undervalued by the market.

In a stock research report last week, the veteran Wall Street investment bank said shares of Singapore-based Bitdeer (BTDR) currently have “the lowest implied value of all the miners we cover,” when comparing the company’s current price to expectations for hash. I said there is. growth rate.

“We believe BTDR can increase hash rate capacity by more than four times,” Cantor wrote. As of May 2024, the company had a combined hash rate of 22.5 exahashes per second (EH/s) across its own mining, cloud mining, and hosting services.

Cantor said hash rates could increase by another 59.5 EH/s, given that the company plans to add 1,079 megawatts of power to its various global data centers. This would make it one of the largest publicly traded mining companies, surpassing Marathon Digital’s (MARA) year-end 2024 expectations of 50 EH/s.

The investment bank said it expects most of Bitdeer’s new energy capacity to be completed across its Norway, Ohio, Texas and Bhutan facilities by the end of 2025. For the full year, Bitdeer’s EBITDA is expected to be $576.7 million, nearly half of its current market capitalization of $1.25 billion.

According to Cantor, one of Bitdeer’s main advantages over other miners is its vertical integration, which includes producing its own mining machines. “The margins that large manufacturers could get from companies like BTDR will disappear,” the analysts wrote, adding that Bitdeer could eventually sell its own equipment for additional revenue.

So far, Cantor believes Bitdeer has been undervalued compared to other mining companies because it is a new market entrant and has less business dedicated to its own mining. However, he explained that the market is underestimating these mine-adjacent projects.

“The base case valuation of the commercial equipment business is $18.46 per share,” Cantor wrote. “We ultimately think this business could be worth twice its current stock value, and that will become clearer over the next six quarters.”

BTDR was trading at $9.08 on Friday, up 50% from last month amid a strong comeback by a number of Bitcoin mining companies this year.

Cantor estimated in January that the full cost for most public miners to mine 1 BTC would be well below the current market price of 1 BTC ($65,200), suggesting that most miners could remain profitable after the halving. It means. In particular, Bitdeer’s estimated production costs were surprisingly low, at just $17,744 per coin.

Cantor Fitzgerald CEO Howard Lutnick described himself as a ‘fan’ of Tether, the world’s largest stablecoin provider, and claimed that his investment bank holds a significant portion of the assets backing the Tether token. Earlier this month, Tether said it had acquired a 25% stake in Bitdeer, allowing the mining company to raise $100 million.

Edited by Ryan Ozawa.