The recent halving event in Bitcoin‘s economic landscape has injected uncertainty into the world of crypto miners. However, according to analysts at Cantor Fitzgerald, optimism prevails in the Bitcoin mining sector.
Despite the challenges posed by the halving, Bitcoin prices have remained buoyant. With a global network hash rate of approximately 600 EH/s, every publicly traded Bitcoin miner stands to profitably mine Bitcoin. This profitability presents an appealing and leveraged avenue for investors looking to capitalize on Bitcoin’s potential, allowing them to mine Bitcoin at a discount to spot prices.
Cantor Fitzgerald highlights growth as a central focus for Bitcoin miners, with growth capital expenditure (capex) aligning with maintenance capex. The deployment of new rigs not only enhances hash rate capacity but also enhances efficiency, thereby reducing the cost of mining Bitcoin.
The research firm has initiated coverage on seven new stocks, all rated “Overweight.” Companies like Cleanspark (NASDAQ: CLSK), Marathon Digital (NASDAQ: MARA), and Riot Platforms (NASDAQ: RIOT) have positioned themselves as prominent players in large-scale Bitcoin mining. These firms have leveraged increased trading activity, robust financial liquidity, and a strong financial position to capitalize on acquisition opportunities.
According to Cantor Fitzgerald, Cleanspark presents a compelling growth narrative, while Riot Platforms offers an attractive combination of growth and valuation. CIFR is noted for its expertise in power, and WULF is seen as a prime player in the AI/HPC (Artificial Intelligence/High-Performance Computing) domain.
While some investors may be disheartened by the recent underperformance of mining stocks compared to Bitcoin’s price, Cantor Fitzgerald suggests that this correlation is sustainable and often behaves like a coiled spring.
Looking ahead, Cantor Fitzgerald forecasts a significant increase in hash rate capacity among the seven miners they cover, projecting a rise from 59.7 EH/s in April 2024 to 230.5 EH/s by the end of 2025. Stable power costs are anticipated to further drive down the cost of mining Bitcoin, assuming network hash remains stable.
The report expresses bullish sentiments towards Bitcoin’s price, expecting the network hash rate to surge to 900 EH/s by the end of 2025. Additionally, Cantor Fitzgerald anticipates an increasing share of total hash controlled by publicly traded Bitcoin miners over time.
However, the report also acknowledges challenges, particularly for marginal operators facing increased costs with Bitcoin halving events. Miners with low costs, scalability, and liquidity are favored, as they are better positioned to seize growth opportunities.
The rise in demand for high-power compute (HPC) amid the AI boom presents an additional avenue for Bitcoin miners to utilize excess power capacity. Miners like Core Scientific Inc (NASDAQ: CORZ) and Iris Energy Ltd (NASDAQ: IREN) are identified as potential beneficiaries of this trend.
In conclusion, while uncertainties persist, the Bitcoin mining sector holds promise for investors, with opportunities for growth and innovation paving the way forward.
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