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Among a slew of publicly traded Bitcoin mining companies, Cantor Fitzgerald says one firm in particular is being vastly undervalued by the market.
In an equity research report last week, the veteran Wall Street investment bank said that the stock of Singapore-based Bitdeer (BTDR) currently has the “lowest implied value of any miner we cover” when comparing the firm’s present price to its expectations for hash rate growth.
“We believe BTDR can more than 4x its hash rate capacity,” wrote Cantor. As of May 2024, the company had a total hash rate of 22.5 exahashes per second (EH/s) across its self mining, cloud mining, and hosting services.
Given the firm’s planned addition of 1,079 megawatts of power across its various global data centers, Cantor said its hash rate could increase by another 59.5 EH/s. That would make it one of the largest publicly traded mining firms, surpassing Marathon Digital (MARA)’s 2024 year-end expectation of 50 EH/s.
The investment bank said it expects most of Bitdeer’s new energy capacity to be completed by the end of 2025, spread across its Norway, Ohio, Texas, and Bhutan facilities. Throughout that year, it expects Bitdeer’s EBITDA to be $576.7 million—nearly half of its current $1.25 billion market cap.
According to Cantor, one of Bitdeer’s key advantages over other miners is its vertical integration, including the production of its own mining machines. “The margin that the big manufacturers would make off of companies like BTDR would go away,” the analysts wrote, adding that Bitdeer could eventually sell its own rigs for additional income.
Until now, Cantor believes Bitdeer has been undervalued compared to other mining firms because it’s a new market entrant and has less of its business purely devoted to self-mining. However, they explained that the market is underestimating those mining-adjacent businesses.
“Our base case value of the commercial rig business at $18.46/share,” Cantor wrote. “We ultimately think this business could be worth double what shares are worth today, and this is something we will get greater clarity on over the next six quarters.”
BTDR traded for $9.08 on Friday, up 50% over the past month amid a strong comeback for a number of Bitcoin mining firms this year.
Cantor estimated in January that most public miners’ all-in cost to mine one BTC would be well below the market price of 1 BTC today ($65,200), meaning most miners could remain profitable after the halving. Its estimated production cost for Bitdeer, in particular, was strikingly low at just $17,744 per coin.
Cantor Fitzgerald CEO Howard Lutnick has styled himself a ‘fan’ of Tether, the world’s largest stablecoin provider, and he claims his investment bank holds much of the assets backing its token. Earlier this month, Tether disclosed that it had acquired 25% of Bitdeer’s Class A shares, allowing the mining firm to raise $100 million.
This article has been updated to correct Tether's investment in Bitdeer stock. Edited by Ryan Ozawa.