We recently published a list of 7 Best Bitcoin and Blockchain Stocks To Buy According to Analysts. In this article, we are going to take a look at where Bitfarms Ltd. (NASDAQ:BITF) stands against the other Bitcoin and blockchain stocks.
What Has Been Happening in the Crypto Industry?
While the digital medium of exchange, cryptocurrency, is created and stored electronically on the blockchain, the most recognized form of it is Bitcoin. Bitcoin has undergone a major historical event in the first quarter of this year. This was when the block reward for bitcoin miners was decreased from 6.25 BTC per mined block to 3.125 BTC per mined block on April 19, also known as the halving event. This halving event is pre-planned and takes place once every four years to slow the pace at which new coins are created. Through this reduced supply of the coin, the concept of Bitcoin as digital gold remains maintained. Previously, Bitcoin halved in 2012, 2016, and 2020.
The impact of this event was most profound for Bitcoin miners who saw their profitability drop due to a reduction in block rewards. Miners who had access to reliable and inexpensive power sources were believed to better deal with the challenges after the Bitcoin halving event. The hashrate is important to be studied in this regard since it is the speed at which a computer can perform hashing computations. Thus, a higher hash rate means higher chances of successfully mining a block and receiving the block reward, a certain amount of BTC received as a reward after validating a new block of transactions. In the latter part of this article, we will be talking about how some of the most efficient miners stayed resilient after this reward halving. To read more about the Bitcoin companies and their response to the macro environment in 2024, you can go through our recent piece on the 15 Biggest Publicly Traded Bitcoin Companies.
The Ongoing US Politics: An Opportunity for the Crypto Industry?
Under the current political dynamics in the US, the crypto industry sees an opportunity with ongoing talks about how Vice President Kamala Harris now running for President, could probably be in support of emerging tech such as the crypto industry. However, the critics oppose the view. In an interview with CNBC, Dennis Kelleher, CEO of Better Markets, emphasized that Harris should not accept pressure from the crypto industry. He mentions the foremost reason behind this as crypto not being among the top concerns of Americans. Among the 88% of Americans who have heard of crypto, a majority 75% of them have hostile views of it. Furthermore, between 61% and 75% of the voters in six of the key swing states view crypto negatively.
Secondly, crypto lacks any legitimate and socially acceptable use with its least harmful use being speculation and gambling. Thirdly, Vice President Harris has been an advocate of investor and consumer protection so she should support the core elements of the financial system, in the views of Kelleher. Lastly, crypto has been discriminating against people of color as they tend to lose money relative to the traditional financial system. While Kelleher believes that innovation and investing in technology are fundamental to the US economy, he states that all financial products need to be federally regulated while the crypto industry seeks special treatment regarding this form of regulation.
Simultaneously, crypto is being embraced through a boost of innovation and forward-thinking as evident from the state of Wyoming which looks forward to launching the country’s first US government-issued stablecoin. The state governor Mark Gordon sees a bright future for digital assets and thinks that the entrepreneurial state could make a difference. Another development in the market was Bitcoin moving 1.84% higher and surpassing the $61,000 mark after Fed Chairman Powell signaled an adjustment to the US monetary policy after months of soaring interest rates. With the most anticipated interest rate cuts on the horizon, the crypto industry will have to wait and watch how the circumstances unfold.
With that being said, let’s move to the 7 best bitcoin and blockchain stocks to buy according to analysts.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A bustling server farm, reflecting the company’s investment into cryptocurrency mining.
Bitfarms Ltd. (NASDAQ:BITF)
Average Upside Potential: 68.78%
Bitfarms Ltd. (NASDAQ:BITF) is a global Bitcoin self-mining company which was founded in 2017. The company runs vertically integrated mining operations with onsite technical repair, proprietary data analytics, and company-owned electrical engineering and installation services. The Bitcoin miner has a diversified production platform composed of 8 industrial-scale facilities in Canada, 2 in the US, 1 in Argentina, and 3 in Paraguay. The firm’s data centers are powered by more than 75% renewable power.
Currently, Bitfarms serves as the only publicly traded crypto mining company audited by a Big Four accounting firm. The firm manages one of the largest internationally diversified portfolios of energy contracts in the Bitcoin data center business and has shown ample progress in growing its business. It recently added 220 MW of capacity in Paraguay and Pennsylvania while it energized its 70 MW site in Paso Pe, the company’s largest site to date. Simultaneously, it stepped into the most attractive energy market in the US through its new site in Sharon while unlocking new opportunities beyond Bitcoin mining, such as HPC/AI. For the second quarter, Bitfarms had a hashrate of 11.1 exahashes per second, up from 6.5 exahashes per second in the first quarter. This implies that Bitfarms is implementing a robust growth strategy with a focus on US expansion and diversification from Bitcoin mining.
Based on the aforementioned plans, the firm is well set to reach over 35 exahashes per second in 2025 which will be a 67% growth from 21 exahashes per second, the year-end target for 2024. With the appointment of Ben Gagnon as the Chief Executive Officer who used to be the Chief Mining Officer and has a 9-year past full-time experience in the bitcoin mining industry, Bitfarms is positioned for accelerated growth through 2024. The firm’s impressive energy portfolio and strategic approach to growth rank it among some of the best Bitcoin stocks to buy. As of August 26, the average upside potential for the stock stands at 68.78%.
Overall, BITF ranks 5th on our list of the best Bitcoin and blockchain stocks to buy. While we acknowledge the potential of BITF as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than BITF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
