Cryptocurrency mining companies aim to significantly expand Bitcoin mining capacity
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In my view, the next 24-36 months will be another big bull market period for cryptocurrencies.direct exposure Bitcoin (BTC-USD) and high-quality altcoins can provide multibagger returns during this period. At the same time, investors can consider proxy exposure to the crypto bull market. One way is to buy fundamentally strong crypto mining stocks.
It’s worth noting that some of the best Bitcoin miners had a volatile year in 2023. Of course, the upward bias was in sync with Bitcoin’s uptrend. With the Bitcoin Spot ETF and the impending halving event, I expect crypto assets to soar this year. The possibility of expansionary monetary policy will add fuel to the fire.
So now is a good time to consider exposure to the best crypto mining stocks.Some of the relatively big names are: riot platform (NASDAQ:riot) and marathon digital (NASDAQ:Mara) is in the spotlight. In this column, we’ll focus on crypto mining stocks that are hidden gems.
bit farms (NASDAQ:BITF) stock is one of the penny crypto mining stocks that could deliver a 5x return, assuming Bitcoin is trading at all-time highs. BITF stock has increased 91% in 12 months. However, there has been a significant correction from the recent high of $3.56 to the current level of $2.1. I think this is a good opportunity to gain new knowledge.
It is worth noting that as of December 2023, Bitfarms reports a hash rate capacity of 6.5EH/s. The company expects its production capacity to increase to 17EH/s. Additionally, redeployment can increase capacity up to 21EH/s. Therefore, assuming a scenario in which Bitcoin continues to rise, BitFarm is positioned for impressive growth and cash flow.
I must add that Bitfarms has a total liquidity buffer of $118 million. Furthermore, the company will be debt-free next month. Therefore, there is sufficient financial flexibility to pursue sustained expansion. Strong cash flow gives us more flexibility to pursue growth in 2024 and beyond.
Crypto mining (CIFR)
crypto mining (NASDAQ:CIFR) share price has increased 108% in the past 12 months. However, with aggressive growth plans, I’m bullish on CIFR stock’s further upside. Of course, the key assumption is that Bitcoin continues to trend upward. It’s also worth noting that the short interest in CIFR stock is 23%. It seems likely that a short squeeze rebound will occur in the near future.
In terms of growth, Cipher Mining reports a production capacity of 7.2EH/s as of December 2023. Expansion plans (including purchase options) could increase production capacity to 24.2EH/s. Therefore, the company is poised for aggressive growth over the next 24 months. If Bitcoin trades near all-time highs, this will translate into solid free cash flow.
Considering the value of Bitcoin assets, it is worth noting that as of December 2023, Cipher reports liquidity of $120 million. Additionally, the company has no debt, giving it more financial flexibility to pursue expansion in this year and beyond.
HIVE Digital Technology (HIVE)
HIVE Digital Technology (NASDAQ:hive) Inventories have been flat over the past 12 months. This under-the-radar crypto mining stock appears to be on the verge of an imminent upswing. Positive business developments support my view.
As of Q2 2024, HIVE reports a hash rate capacity of 4.3EH/s. This year, the company expects to increase its production capacity to 6EH/s. With an attractive cost profile, we expect it to deliver healthy EBITDA margins if Bitcoin continues its upward trend. Last quarter, the company reported a gross operating margin of 21%.
Another reason to like HIVE is that the company is looking beyond Bitcoin mining for growth. HIVE Digital also focuses on AI, HIVE Cloud, and GPUs. I’m bullish because the company is spreading its wings and growth is not limited to Bitcoin mining. I wouldn’t be surprised if HIVE explores applications of blockchain technology in various industries in the coming years.
On the date of publication, Faisal Humayun did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publishing guidelines.