According to a report by Decrypt, among numerous publicly traded Bitcoin mining companies, the veteran Wall Street investment bank Cantor Fitzgerald believes that the value of the Singapore-based BitDeer is severely underestimated by the market.
In a stock research report released last week, Cantor Fitzgerald compared the current price of BitDeer stock (BTDR) with its expected hash rate growth, stating that the company’s stock currently has the “lowest implied value” among all the mining companies they have researched.
Cantor wrote, “We believe that BitDeer’s hash rate capacity can reach more than 4 times.” As of May 2024, BitDeer has a total hash rate of 22.5 exahashes/s (EH/s) in self-mining, cloud mining, and hosting services. Considering the company’s plans to add 1,079 megawatts of power to its data centers globally, Cantor suggests that its hash rate could increase by another 59.5 EH/s, making BitDeer one of the largest publicly traded mining companies, surpassing Marathon Digital’s expected 50 EH/s by the end of 2024.
The investment bank stated that most of BitDeer’s new electricity capacity is expected to be completed by the end of 2025, spread across its facilities in Norway, Ohio, Texas, and Bhutan. Cantor expects BitDeer’s annual EBITDA (earnings before interest, taxes, depreciation, and amortization) to reach $5.767 billion, close to half of its current market value of $12.5 billion.
According to Cantor, one of BitDeer’s key advantages compared to other mining companies is its vertical integration, including the production of its own mining machines. Analysts wrote, “The profits that large manufacturers earn from companies like BTDR will disappear.” They added that BitDeer could eventually sell its mining machines for additional revenue.
So far, Cantor believes that BitDeer has been consistently undervalued compared to other mining companies because it is a new market participant, and a smaller portion of its business is dedicated purely to self-mining. However, they explained that the market is undervaluing businesses related to mining.
BitDeer’s stock price has risen by 48% from early June to the present, with a closing price of $9.08 on Tuesday. Morgan Stanley analysts stated on Monday that as of June 15, the market value of publicly traded Bitcoin mining companies in the United States reached a record $22.8 billion. U.S. mining stocks rebounded in the first half of June due to the increase in network hash rate and diversification opportunities in AI data centers.
Cantor Fitzgerald had estimated in January of this year that the “all-in cost” of producing one Bitcoin for most publicly traded mining companies would be significantly lower than today’s market price of Bitcoin ($65,200), meaning that most miners could remain profitable after Bitcoin halving. Especially with their extremely low production cost estimate for BitDeer, at only $17,744 per coin.
Cantor Fitzgerald’s analysis of publicly traded mining companies’ all-in cost per coin, source: Matthew Shultz
Cantor Fitzgerald CEO Howard Lutnick has expressed himself as a “fan” of Tether, the world’s largest stablecoin issuer, and claimed that Cantor Fitzgerald holds most of the assets supporting USDT. Earlier this month, Tether disclosed that it holds a 25% stake in BitDeer, a significant increase in holdings resulting from its recent $100 million private placement transaction with the mining company.