Author: Ben Strack, Casey Wagner, Blockworks; Translated by: Deng Tong, Golden Finance
Second-quarter earnings from Bitcoin miners have trickled out over the past few weeks, giving investors a clearer picture of where they stand after the halving.
April’s Bitcoin halving helped push mining difficulty to new highs, while hash prices — a measure of mining revenue potential — are lower than ever before.
Nishant Sharma, founder of BlocksBridge Consulting, noted that the companies that are best positioned in the market segment (on a pure mining basis) are those with low hashing costs and high hash rate realization.
“The lower hash cost means that the company’s mining machines are more efficient than others and/or the company has received relatively low energy prices,” he told Blockworks. “At the same time, the higher hash rate achieved means that the company is able to utilize most of its installed mining capacity.”
CleanSpark beat its biggest competitor in the second quarter with lower hashing costs, according to BlocksBridge Consulting. Meanwhile, Marathon Digital was at the top of the list in that metric.
In terms of high achieved hashrate (which is a good thing), Bitdeer, Bitfarms, and CleanSpark were the top three in July.
Bitfarms announced some board changes yesterday. Rival Riot Platforms said on Tuesday it had increased its stake in Bitfarms to 18.9 percent, after offering to buy the company outright earlier this year.
"We continue to believe BITF's growth potential is underappreciated and the acquisition interest provides downside protection for the share price," said Joe Flynn, an analyst at Compass Point Research & Trading, in a research note.
Beyond mining-focused metrics, some mining stocks may be more attractive to investors because they have BTC reserves or are betting on the growth of artificial intelligence.
Flynn noted in an Aug. 2 report that Marathon loses money while mining BTC. Despite this, the company purchased $100 million worth of BTC in July as part of its new HODL strategy. The company said Monday that it is raising $250 million through a private placement of convertible senior notes — proceeds that can be used to purchase more Bitcoin.
Flynn added that Marathon is currently “a leveraged play on BTC,” similar to MicroStrategy. He reiterated his buy rating on the stock but lowered his MARA price target to $21 from $27.
Then there are companies that are turning to high performance computing (HPC) and/or AI to diversify their revenue streams.
Flynn believes that Core Scientific is “the best pure-play name for the conversion of BTC miners to HPC.” After all, the company last week expanded its deal with CoreWeave to provide an additional 112 megawatts of infrastructure for HPC operations.
Smaller miner Terawulf noted in its July production report that it continues to advance its 2MW AI/HPC infrastructure proof-of-concept build. Terawulf shares are down more than 40% from a month ago, but have risen since reporting second-quarter earnings on Monday.
“We believe the stock sell-off seen over the past few weeks provides an interesting opportunity for HPC’s option value discount,” Flynn said.
Then there's Hut 8, which, according to Benchmark analyst Mark Palmer, still has multiple upsides despite second-quarter revenue and profit falling short of Wall Street expectations.
As of June 30, the company held 9,102 BTC, so it is expected to benefit from the rise in Bitcoin prices. Then there is Hut 8 CEO Asher Genoot who previously noted that the company will seek to build out its HPC vertical business to support AI applications.
“We believe HUT shares could receive a meaningful boost if it announced that it had signed a significant new AI partnership, or had placed a significant order for next-generation bitcoin mining equipment,” Palmer wrote in a note Tuesday.
