Cantor Fitzgerald believes Bit Deer stock is severely undervalued anticipates significant increase in computing power

Cantor Fitzgerald believes Bit Deer stock is severely undervalued anticipates significant increase in computing power

Cantor Fitzgerald believes Bit Deer stock is severely undervalued anticipates significant increase in computing power

According to a report by Decrypt, among the many publicly traded Bitcoin mining companies, veteran Wall Street investment bank Cantor Fitzgerald believes that the value of Bitdeer, headquartered in Singapore, is severely undervalued 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 over 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. Given the company’s plans to add 1,079 megawatts of power to its data centers around the world, Cantor stated 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 power capacity is expected to be completed by the end of 2025, distributed across its facilities in Norway, Ohio, Texas, and Bhutan. Cantor expects Bitdeer’s EBITDA (earnings before interest, taxes, depreciation, and amortization) for the year 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 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 undervalued compared to other mining companies because it is a new market participant and a smaller part of its business is dedicated to self-mining. However, they explained that the market is underestimating businesses related to mining.

Bitdeer’s stock price has surged by 48% from early June to date, with a closing price of $9.08 on Tuesday this week. 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. With the rise in network hash rate and the diversification opportunities in artificial intelligence data centers, US mining stocks rebounded in the first half of June.

Cantor Fitzgerald estimated in January 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 even after the Bitcoin halving. Particularly notable is 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 previously stated that he is 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, with the significant increase in Bitdeer’s holdings being the result of its recent $100 million private placement deal with the mining company.