Author: JoyChen, EvanLu, Waterdrip Capital
As the global financial regulatory environment becomes clearer, the cryptocurrency market has gradually moved from the original "niche circle" to the mainstream financial system. Since the US election, Trump's election as president has had a positive impact on the cryptocurrency industry, promising to take a more friendly approach. Regulatory policies, including the establishment of a national bitcoin reserve and the encouragement of the United States to expand bitcoin mining activities, boosted market confidence. In the following days, the capital market began to be generally transmitted. Against this background, multiple regions Blockchain concept stocks generally rose.
At present, more and more listed companies have realized the huge potential of blockchain technology and actively incorporated it into their company's strategic layout. Many blockchain concept stocks have a strong development momentum and have gained significant attention in the market. These companies have promoted the digital transformation of their businesses and value creation by introducing blockchain technology, and have gradually become important players in the industry. We have closely followed many stocks in this field and have seen their performance in the capital market. It is becoming more and more eye-catching, and is expected to usher in greater development opportunities in the future driven by blockchain:
In recent years, the regulatory dividends brought by the launch of cryptocurrency-related ETFs (such as Bitcoin spot ETFs) in the United States have marked that cryptocurrencies are no longer limited to the closed digital currency market, but are deeply integrated with the traditional capital market. As a pioneer, Grayscale's Bitcoin Trust (GBTC) has become a bridge for traditional investors to enter the crypto market. Data shows that the asset management scale of BlackRock's Bitcoin Spot ETF (IBIT) has reached US$17.243 billion. It has been in a state of net inflow almost since the beginning of the year. The Grayscale Bitcoin Spot ETF (GBTC) manages assets of US$13.659 billion, showing investors' interest and confidence in this emerging asset class.
The total market capitalization of the current cryptocurrency market is approximately $3.2 trillion , which can be divided into three main parts by asset class:
Bitcoin (BTC) As the core asset of the entire crypto market, Bitcoin currently has a market value of approximately $ 1.9 trillion , accounting for more than 50% of the total market value of cryptocurrencies. It is not only a value storage recognized by traditional finance and native crypto, but also a Bitcoin is a tool that has become the first choice of institutional investors due to its anti-inflation characteristics and limited supply, and is known as "digital gold". Bitcoin plays a key role in the crypto market, stabilizing the market while also providing a platform for traditional assets and native It provides a bridge for interconnection between on-chain assets.
Native on-chain assets include public chain tokens (such as Ethereum ETH), decentralized finance (DeFi) related tokens, and functional tokens in on-chain applications. This field is diverse and highly volatile. Market performance is driven by technological updates and user demand. The current market value is about 1.4 trillion US dollars, which is far lower than the high growth expected by the market.
The combination of traditional assets and cryptographic technology covers emerging projects such as on-chain real-world asset (RWA) tokenization and blockchain - based securitized assets. The popularization of blockchain technology and the deep integration of traditional finance are developing rapidly. By tokenizing traditional assets and improving liquidity, it is also one of the main driving forces for the growth of the crypto market in the future. We are confident in this part. It is believed that it will drive the transformation of traditional finance towards a more efficient and transparent digital direction and release huge market potential.
Why are we so optimistic about the growth potential of traditional assets?
Over the past six months, Bitcoin's asset attributes have undergone a new evolution, and the dominant force in the capital market has also completed the transition from old forces to new capital pools.
In 2024, the position of cryptocurrency in the traditional financial field has been further consolidated. Financial giants including BlackRock and Grayscale have launched exchange-traded products for Bitcoin and Ethereum, providing more convenient trading for institutional and retail investors. This is a digital asset investment channel, which further confirms the connection with traditional securities.
At the same time, the tokenization trend of real-world assets (RWA) is also accelerating, further improving the liquidity and coverage of financial markets. For example, Germany’s state-owned development bank KfW issued two digital French computer equipment manufacturer Metavisio issued corporate bonds using tokenization to finance its new manufacturing facility in India, which was also shown to be settled via distributed ledger technology (DLT). Traditional financial institutions are using blockchain technology to optimize operational efficiency, and many financial institutions have introduced encryption technology into their business models.
Today, a capital circulation model with Bitcoin as the core asset, ETFs and stock markets as the main channels for capital inflows, and US-listed companies such as MSTR as the carrier platform is continuously absorbing US dollar liquidity and is unfolding in an all-round way.
The combination of traditional finance and blockchain will create more investment opportunities than native chain assets. Behind this trend, it reflects the market's emphasis on stability and practical application scenarios. The traditional financial market has a deep infrastructure. When combined with mature market mechanisms and blockchain technology, greater potential will be released.
This research report will briefly analyze the growth model of blockchain concept stocks, especially the way they are combined with on-chain assets, to explore more innovative investment opportunities. For example, MSTR's additional issuance model shows that through convertible bonds and stock issuance, A typical path of exchanging USD assets for on-chain assets. Recently, MSTR’s stock price has risen rapidly along with the rise in Bitcoin prices, and the yield of its convertible bonds due in 2027 has hit a three-year high. This strategy has made its stock performance far exceed that of traditional technology share.
From these perspectives, we can see that the future development of the crypto market is not just about the incremental growth of digital currency itself, but also about the huge potential for integration with traditional finance. From regulatory dividends to changes in market structure, blockchain concept stocks are in this period. The key nodes of the major trends have become the focus of attention of global investors.
We roughly divide the current blockchain concept stocks into the following categories:
1. Asset-driven concept:
Regarding the concept of asset allocation for blockchain stocks, the company's strategy is to use Bitcoin as the main reserve asset. This strategy was first implemented by MicroStrategy in 2020 and quickly attracted market attention. This year, other companies such as Japanese investment company MetaPlanet and Hong Kong-listed Companies such as Boyaa Interactive have also joined in, and the amount of Bitcoin acquisition has continued to increase. Meta Planet announced the introduction of the key performance indicator "Bitcoin Yield" developed by MicroStrategy. Its BTC Yield in the third quarter was 41.7%, and in the fourth quarter it was 1.3%. The quarter (ending October 25) was as high as 116.4%.
TOP30 listed companies worldwide that use Bitcoin as a company reserve asset, data source: coingeckoSpecifically, the strategy of companies such as MicroStrategy is to provide investors with a new perspective to evaluate the company's value and investment decisions by introducing the key performance indicator of "Bitcoin yield". Based on the calculation of the number of bitcoins held per share, without considering the fluctuation of bitcoin prices, it aims to help investors better understand the behavior of companies purchasing bitcoins by issuing additional common shares or convertible instruments, focusing on measuring bitcoin Balance between the growth of coin holdings and equity dilution. To date, MicroStrategy's Bitcoin investment return has reached 41.8%, which shows that the company has successfully avoided excessive dilution of shareholder interests while continuously increasing its holdings.
However, despite MicroStrategy's remarkable achievements in Bitcoin investment, the company's debt structure still arouses market concerns. According to reports, MicroStrategy's current outstanding total debt is US$4.25 billion. During this period, the company has issued multiple rounds of Convertible bond financing, some of which also come with interest payments. Market analysts are concerned that if the price of Bitcoin falls sharply, MicroStrategy may need to sell some Bitcoin to repay debts. However, there is also a view that MicroStrategy relies on its stable traditional software business. In a low-interest environment, its operating cash flow is sufficient to cover debt interest, so even if the price of Bitcoin plummets, it is unlikely to force the company to sell its Bitcoin assets. In addition, MicroStrategy's stock market value is currently as high as $43 billion, and debt is a large part of its capital structure. This further reduces the liquidation risk.
Although many investors are optimistic about the company's firm Bitcoin investment strategy and believe that it will bring considerable returns to shareholders, some investors have expressed concerns about its high leverage and potential market risks. Due to the extreme volatility of the cryptocurrency market, Any adverse market changes may have a significant impact on the asset value of such companies, and their stock prices are significantly premium to their net asset value. Whether this state can continue is the focus of market attention. It will affect the company's financing ability and thus affect its future Bitcoin purchase plans.
1. Microstrategy (MSTR)
Business Intelligence Software Company
MicroStrategy was founded in 1989 and initially focused on business intelligence and enterprise solutions. However, starting in 2020, the company transformed into the world’s first listed company to use Bitcoin (BTC) as a reserve asset, a strategy that completely changed its Business model and market position. Founder Michael Saylor played a key role in driving this transformation, transforming from an early Bitcoin skeptic to a staunch supporter of cryptocurrency.
Since 2020, MicroStrategy has continued to purchase Bitcoin through its own funds and bond financing. As of now, the company has accumulated approximately 279,420 Bitcoins, with a current market value of nearly US$23 billion, accounting for 50% of the total supply of Bitcoin. About 1%. Among them, the most recent purchase occurred between October 31 and November 10, 2023, when 27,200 bitcoins were purchased at an average price of $74,463. The average holding price of these bitcoins is $39,266, and the current The price of Bitcoin has reached about $90,000, and MicroStrategy's book profit is close to 2.5 times.
Although MicroStrategy's Bitcoin investment faced a paper loss of about $1 billion during the bear market in 2022, the company never sold Bitcoin, but chose to continue to increase its holdings. Since 2023, the strong rise of Bitcoin has driven MicroStrategy's stock price. The return on investment has increased significantly, reaching 26.4% since the beginning of the year, and the cumulative return on investment has exceeded 100%. MicroStrategy's current business model can be seen as a "circular leverage model based on BTC", raising funds to purchase Bitcoin through issuing bonds Although this model brings high returns, it also has certain risks, especially when the price of Bitcoin fluctuates violently. According to analysis, the price of Bitcoin needs to fall below $15,000 before the company may face liquidation risks. With the stock price approaching $90,000, this risk is minimal. In addition, the company's low leverage ratio and strong demand in the bond market further enhance MicroStrategy's financial robustness.
For investors, MicroStrategy can be seen as a leveraged investment tool in the Bitcoin market. With the expectation of a steady rise in Bitcoin prices, the company's stock has great potential. However, it is necessary to be wary of the potential risks that debt expansion may bring. Medium- and long-term risks: In the next 1 to 2 years, MicroStrategy's investment value is still worth paying attention to, especially for investors who are optimistic about the prospects of the Bitcoin market. This is a high-risk, high-return target.
2. Semler Scientific (SMLR)
Semler Scientific is a company focused on medical technology. One of its innovative strategies is to use Bitcoin as its main reserve asset. In November 2024, the company disclosed that it had recently purchased 47 Bitcoins, bringing its total holdings to 1,058. The total investment amounted to approximately $71 million. These acquisition funds were partly from operating cash flow, which shows that Semler is trying to strengthen its asset structure through Bitcoin holdings and become a representative of asset management innovation.
However, Semler's core business remains focused on its QuantaFlo device, which is mainly used to diagnose cardiovascular diseases. However, Semler's Bitcoin strategy is not just a financial reserve. In the third quarter of 2024, the company's Bitcoin holdings The company realized an unrealized gain of $1.1 million, providing Semler with a financial hedge against economic volatility even though revenue for the quarter was down 17% year over year.
Although Semler's current market value is only US$345 million, far lower than MicroStrategy, its strategy of using Bitcoin as a reserve asset has made it regarded by investors as a "mini MicroStrategy."
3. Boyaa Interactive
Boyaa Interactive is a Hong Kong- listed company whose main business is games. It is a developer and operator ranked among the top in China’s board and card game industry. In the second half of last year, it began to test the crypto market, aiming to fully transform into a Web3 listed company. It has purchased crypto assets such as Bitcoin and Ethereum on a large scale, invested in multiple Web3 ecological projects, and signed a subscription agreement with Pacific Waterdrip Digital Asset Fund SPC under Waterdrip Capital to develop Web3 games. The company once said: "Purchasing and holding cryptocurrencies is an important measure for the group to develop and deploy Web3 business, and is also an important part of the group's asset allocation strategy." As of the latest announcement, Boyaa Interactive holds 2,641 bitcoins and 15,445 Ethereums, with total costs of approximately US$143 million and US$42.578 million, respectively.
It is worth mentioning that due to the recent active cryptocurrency market, Bitcoin and cryptocurrencies have seen a sharp rise. If calculated based on the closing price of cryptocurrencies on the 12th, Boyaa Interactive's floating profit on Bitcoin is nearly $90.22 million; on Ethereum, According to reports, Boyaa Interactive's floating profit was approximately US$7.95 million, and the combined floating profit of the two was nearly US$100 million.
The continued rise in cryptocurrency prices has aroused the market's high attention to related concept stocks. Taking the Hong Kong stock market as an example, as of November 12, Linekong Interactive rose 41.18%, Xinhuo Technology Holdings rose 27.40%, and OKEx Cloud Chain rose 11.65%. %, showing the strong performance of blockchain-related companies. The Hong Kong stock blockchain market is still in its early stages of development, but the policy environment is continuously being optimized. The recent policies supporting the development of blockchain encourage open innovation and create a good environment for enterprises. There is room for growth. Some companies rely on the asset-driven effect brought by cryptocurrency price fluctuations, while they are also actively exploring the practical application of blockchain technology in games, finance, metaverse and other fields. The further growth of the market in the future will depend on The effectiveness of technology implementation and the improvement of the ecological system provide investors with clearer direction and confidence.
The value of the cryptocurrency held by Boyaa Interactive has reached about HK$2.2 billion. This means that the total value of the cryptocurrency currently held by Boyaa Interactive exceeds the current market value of the company. In the second quarter of 2024, the company recorded a profit of About 104.8 million yuan, a year-on-year increase of 5.8%. Among them, the revenue from web games and mobile games was 29 million yuan and 69 million yuan respectively, and the digital asset appreciation income was 6.74 million yuan. As for the reasons for the increase in revenue, Boyaa stated in the announcement: "It is mainly due to the The Group has gained digital asset appreciation benefits from the cryptocurrency it holds.”
At the same time, the company plans to increase its holdings of cryptocurrencies by up to $100 million in the next 12 months. In addition, Boyaa Interactive has formed a team dedicated to Web3 game development and related infrastructure research and development. Benefiting from the significant growth of cryptocurrency assets, its first quarter Profits increased by 1130% year-on-year, pushing the company's stock price up nearly 3.6 times since the beginning of the year, becoming a typical asset-driven blockchain concept stock in the market. For this stock, Boyaa Interactive's performance depends on the fluctuations of the cryptocurrency market, and its stock price may Continues to be driven by growth in asset values.
2. Mining Concept
Blockchain mining stocks have received great attention from the market in recent years, especially with the fluctuations in the prices of cryptocurrencies such as Bitcoin. Mining companies not only benefit from the direct benefits of digital currencies, but also participate in other high-growth industries to a certain extent. Layout, especially artificial intelligence (AI) and high-performance computing (HPC) business. With the vigorous development of AI technology, the demand for AI computing power is increasing rapidly, which has brought new support to the valuation of mining concept stocks. In particular, as electricity contracts, data centers and their supporting facilities become increasingly scarce, mining companies can gain additional revenue by providing computing infrastructure for AI needs.
However, we generally believe that not all mining companies can fully meet the needs of AI data centers. Mining operations prioritize cheap electricity supply and often choose locations with lower prices and short-term power instability to maximize profits. In contrast, AI data centers pay more attention to the stability of electricity, so they are less sensitive to changes in electricity prices and prefer long-term stable electricity supply. Therefore, not all mining companies’ existing power equipment and data centers are Suitable for direct transformation into an AI data center.
Mining concept stocks can be divided into the following categories:
Mining companies with mature AI / HPC businesses: These companies not only have a presence in the mining field, but also have mature AI or HPC businesses and are backed by technology giants such as NVIDIA. For example, Wulf , APLD , CIFR , etc. It not only participates in cryptocurrency mining, but also integrates mining and AI computing power needs to a certain extent by building AI computing power platforms and participating in AI reasoning and other businesses, thus gaining more market attention.
Focus on mining and hoard a large amount of coins: These companies mainly focus on mining business and hold a large amount of digital currencies such as Bitcoin. CleanSpark (CLSK) is one of the representatives of this type of company, and its hoarding accounts for 10% of the unit market value. 17.5%. In addition, Riot Platforms (RIOT) is a similar company, with its hoarded coins accounting for 21% of its unit market value. These companies accumulate cryptocurrencies such as Bitcoin in the hope of making profits when the market price rises in the future.
Diversified business complex: This type of company not only mines and hoards cryptocurrencies, but also dabbles in AI reasoning, AI data center construction, etc. Marathon Digital (MARA) is a representative of this type of company. The amount of coins accounts for 33% of the unit market value. These companies usually reduce the risk of a single field through diversified business layout, while improving overall profitability.
As AI demand increases, AI computing power and high-performance computing businesses will increasingly be combined with blockchain mining businesses, which may further increase the valuation of mining companies. In the future, mining companies will not only be digital currency "Miners" may also become important infrastructure providers behind the development of AI technology. Although this road is full of challenges, in order to meet this trend, many mining companies have accelerated the layout of AI computing power and data center construction, and are committed to to gain a foothold in this emerging field.
1. MARA Holdings (MARA)
One of the largest Bitcoin self-mining companies in North America, founded in 2010 and listed in 2011. The company is dedicated to mining cryptocurrencies, focusing on the blockchain ecosystem and the generation of digital assets. The company is based on its proprietary infrastructure and smart Mining Software provides managed mining solutions, mainly mining Bitcoin. Marathon, similar to Riot, also experienced a 12.6% drop in its share price, followed by a further decline. However, Marathon's share price has risen rapidly over the past year.
According to the latest data in October, MARA (Marathon Digital) has achieved a computing power of 32.43 EH/s, becoming the first listed mining company to reach this scale. It is expected that the computing power will increase after its new 152 MW power capacity is put into use. About 10 EH/s. MARA recently acquired two data centers in Ohio and built a third new site, adding 152 MW of mining power capacity, which is scheduled to be fully operational by the end of 2025. MARA’s Chief Financial Officer Chief Executive Officer Salman Khan said the asset acquisition cost about $270,000 per MW, and expected the deployments to help the company achieve its goal of 50 EH/s of computing power by 2024.
In addition, MARA announced on November 18 that it would sell $700 million worth of convertible senior notes due in 2030. The funds raised will be used to purchase Bitcoin, repurchase notes due in 2026, and support existing businesses. MARA expects to use the net proceeds from the notes, up to $200 million of which will be used to repurchase a portion of the convertible notes due 2026, and the remainder to purchase additional bitcoin and for general corporate purposes, including Working capital, strategic acquisitions, expansion of existing assets, and repayment of additional debt, etc. This move further demonstrates MARA's long-term bullish attitude towards Bitcoin.
2. Core Scientific (CORZ)
Blockchain infrastructure and cryptocurrency mining services
Core Scientific Inc. was founded in 2017. Its business is mainly divided into two parts: equipment sales and hosting services, as well as self-built mining farms for Bitcoin mining. The company generates revenue by selling consumption-based contracts and providing hosting services . , while the digital asset mining segment's revenue comes from computing devices operated by the company that process transactions on the blockchain network and participate as part of a user pool in exchange for digital currency assets.
Recently, Microsoft (MSFT.US) announced that it will spend nearly $10 billion between 2023 and 2030 to rent servers from artificial intelligence startup CoreWeave . CoreWeave has signed a contract with Bitcoin mining giant Core Scientific to add 120 megabytes of storage. CoreWeave has signed a multi-million-dollar contract with CoreWeave to host 502 MW of high-performance computing capacity. Through several rounds of expansion, CoreWeave currently hosts a total of 502 MW of GPU capacity in Core Scientific’s data centers. Core Scientific’s stock price has risen significantly since signing the multi-billion-dollar contract with CoreWeave. , with a cumulative increase of nearly 300%. The company also plans to transform some of its data centers to host CoreWeave's more than 200 megawatts of GPUs.
The 12-year hosting contract is expected to generate $8.7 billion in total revenue for Core Scientific. Meanwhile, while its Bitcoin mining hashrate remained stable, its market share declined from 3.27% in January to It fell to 2.54% in September.
Overall, Core has perfectly digested the combination of AI and Bitcoin, two hot topics. Especially in the field of AI data centers, Core Scientific has won large contracts and actively expanded new customers, showing strong development potential. The market share of Bitcoin mining business has declined, but the company's progress in AI data centers has provided strong support for its long-term stable growth, and future growth is still expected.
3. Riot Platforms (RIOT)
Riot Platforms , headquartered in Colorado, USA, focuses on blockchain technology construction, support and digital currency mining. Previously, the company has also invested in several blockchain startups, including Canada's Bitcoin exchange Coinsquare, but The focus has now shifted entirely to cryptocurrency mining.
Riot’s stock has experienced significant volatility, particularly when the price of Bitcoin fell, with the company’s shares falling 15.8% at one point. However, despite this, the company’s stock is still up more than 130% over the past year.
Although the latest market positives have pushed the stock price up 66% in just one week, Riot's operating conditions are not ideal. According to its third-quarter 2024 financial report, the company's total revenue was US$84.8 million, of which Bitcoin mining revenue Riot’s net loss in the second quarter was $84.4 million, compared to a net loss of only $0.54 per share in the same period last year. Overall, Riot's losses continue to expand. Although its stock price has risen in the short term, the short-term rise in stock price is only due to the rise of the overall market. Whether it can achieve long-term stock price growth is still a question mark.
4. CleanSpark (CLSK)
Green Energy Cryptocurrency Mining
CleanSpark , a company focused on bitcoin mining using renewable energy, saw its revenue grow to $104.1 million in the second quarter of 2024, up $58.6 million, or 129%, from $45.5 million in the same period last year. However, net losses for the three months ended June 30, 2024, were $236.2 million, or $1.03 per share, compared with a loss of $14.1 million, or $0.12 per share, in the same period last year. However, despite the market rally in early November, CleanSpark (CLSK) did not benefit from it because the company was suspended during this period. The company founder explained that the reason for the suspension was due to the recent share subscription in the acquisition process. The proportion was calculated incorrectly. The company also announced the completion of the acquisition of GRIID , with the goal of increasing the total computing power of the mine to 400 megawatts (MW) in the next few years. At the same time, CleanSpark holds a large amount of Bitcoin and other digital currencies. 17.5% of the unit’s market cap , meaning a significant portion of its market cap is backed by its Bitcoin holdings.
From the perspective of stock performance, CleanSpark is one of the representative Bitcoin miners with renewable energy as its core. With its green mining strategy and relatively low energy costs, it has long-term development potential. The company acquired GRIID and expanded its mining business. The company has a strong market share and a strong market share, indicating that it has a positive strategic layout in expanding its market share and improving its competitiveness. However, although the company's revenue has increased significantly, due to its large losses, investors will pay attention to its profitability and cash flow. Important factors affecting future stock price trends. CleanSpark's stock price may fluctuate greatly due to the fluctuations in Bitcoin prices and energy costs.
5. TereWulf (WULF)
Using green energy for cryptocurrency mining
Energy companies are becoming an important force in the cryptocurrency industry as operational risks are reduced and profit margins are increased. TeraWulf, a cryptocurrency subsidiary of Beowulf Mining Plc , recently revealed in a regulatory filing that it expects its mining capacity to reach 500 million by 2025. It will reach 800 megawatts, accounting for 10% of the current computing power of the Bitcoin network. TeraWulf focuses on providing sustainable cryptocurrency mining solutions, especially focusing on utilizing renewable energy such as hydropower and solar energy, and is also developing AI data centers.
TeraWulf recently announced that it would increase the total size of its 2.75% convertible bonds to $425 million, of which $118 million would be used for stock repurchases. The financing also includes an option to issue additional shares within 13 days after the issuance. The new bonds, which mature in 2030, will be used partly for stock buybacks and the rest for general corporate expenses.
TeraWulf said it would prioritize share buybacks and continue to advance its organic growth and potential strategic acquisitions in high-performance computing and AI. After the announcement, TeraWulf's stock price has risen nearly 30% since last Friday, surpassing Bitcoin's Mining companies have recently raised funds through convertible bonds and Bitcoin-backed loans to cope with the decline in computing power prices after the Bitcoin halving.
Overall, TeraWulf's layout in clean energy and AI mining shows strong growth potential. In the short term, the company may benefit from the market's high attention to green energy and AI mining. However, considering the mining industry's Volatility and the overall market environment, long-term performance still needs to be continuously monitored and evaluated. Under the current situation, TeraWulf's stock price rise has certain hype factors, but it is also expected to further drive growth through its sustainable development strategy.
6. Cipher Mining (CIFR)
Bitcoin Mining Companies
Cipher Mining is primarily focused on developing and operating Bitcoin mining data centers in the United States, with the goal of enhancing the infrastructure of the Bitcoin network.
Recently, Cipher Mining announced that it has further expanded its credit cooperation with Coinbase and established a term loan of $35 million. According to the financial report disclosed on November 1, the company increased its original credit line of $10 million to $15 million and New $35 million term loan.
In addition, as the demand for artificial intelligence technology in the crypto market grows, the valuation of Cipher Mining's AI business has also risen. However, compared with peer companies such as CORZ, APLD, and WUFL , Cipher Mining's stock price has lagged behind. Infrastructure investment in the field of Bitcoin mining has achieved certain results, but progress in the layout of AI technology has been relatively slow, which may affect its stock price performance in the short term.
7. Iris Energy (IREN)
Bitcoin mining with renewable energy
Focus on Bitcoin mining through green energy (especially hydropower) worldwide. Bitcoin mining business driven by clean energy is the main focus, with environmental sustainability as its core competitiveness, which is also what distinguishes it from other mining Compared with traditional coal and oil energy, IREN uses clean energy mining to reduce carbon emissions and lower operating costs. IREN currently has multiple clean energy-driven mining facilities, especially in Canada and the United States. Regions rich in clean energy have invested heavily in infrastructure.
In addition, IREN is also trying to make arrangements in the field of cloud computing, but the prospects of this part of the business are not as clear as its clean energy mining business. Although cloud computing as a business model can reduce the demand for mining hardware to a certain extent, It also provides investors with a more flexible way to make profits, but its revenue model and market acceptance are still in the early stages, and compared with traditional Bitcoin mining, it is difficult to show significant profitability. The exploration of power can be regarded as more of a test project, which is far from mature and its valuation is difficult to overestimate.
In terms of monetizing energy assets, IREN's progress and potential are currently not as good as some of its competitors, such as CIFR (Cipher Mining) and WULF (Stronghold Digital Mining). These companies have made progress in the effective integration of traditional energy assets and clean energy applications. Although IREN’s unique advantages in the field of green energy mining cannot be ignored, its monetization process is still lagging behind CIFR and WULF, and it is difficult to form sufficient market share in the short term. Funds are flowing back.
8. Hut 8 (HUT)
Hut 8, headquartered in Canada, is a company that conducts cryptocurrency mining operations mainly in North America and is one of the largest innovative digital asset miners in North America. The company operates large-scale energy infrastructure and always adheres to environmentally friendly operations.
In 2023, Hut 8's annual revenue reached $121.21 million, a year-on-year increase of 47.53%. In the quarter ending September 30, 2024, revenue further increased to $43.74 million, a year-on-year increase of 101.52%. This increase makes the past 12 months The total revenue reached US$194.02 million, with an annual growth rate of 209.07%.
According to the third quarter report, Hut 8 has accelerated the pace of building its digital infrastructure platform and promoting its commercialization process in the past few months. The company's various data show strong growth momentum and are constantly strengthening its business development. .
9. Bitfarms (BITF)
Canada-based Bitfarms focuses on the development and operation of Bitcoin mining farms and continues to expand its mining business. The company recently announced plans to invest an additional $33.2 million to purchase 18,853 Antminer T21 Bitcoin mining machines originally planned from Bitmain. Upgraded to the S21 Pro model. According to the third quarter financial report, Bitfarms has modified its procurement agreement with Bitmain and expects the upgraded mining machines to be delivered between December 2024 and January 2025. According to TheMinerMag's analysis, thanks to the adoption of the latest With each generation of mining machines, Bitfarms' mining machine costs have been significantly reduced: from US$40.6 per PH/s in the first quarter to US$35.5 in the second quarter, and further to US$29.3 in the latest quarter.
Overall, Bitfarms has improved mining efficiency while reducing costs by updating mining equipment and optimizing procurement strategies, showing strong growth potential. This strategy can not only improve the company's profitability, but also enhance its competitiveness. As the cost of mining machines continues to decrease, Bitfarms is expected to continue to gain an advantage in the field of Bitcoin mining, especially if the price of Bitcoin rebounds or market demand grows.
10. HIVE Digital Technologies (HIVE)
Cryptocurrency mining company, hpc business.
Hive Digital recently announced the acquisition of 6,500 Canaan Avalon A1566 Bitcoin mining machines and plans to increase the total computing power to 1.2 EH/s, a move that shows the company's continued investment in the field of cryptocurrency mining. At the beginning, Hive Digital has made it clear that it will shift more resources and focus to high-performance computing (HPC) in the future. The company believes that HPC business has a higher profit margin than Bitcoin mining and has certain technical barriers. , which can bring more sustainable revenue growth to the company. To this end, Hive transformed 38,000 Nvidia data center GPU cards originally used for Ethereum and other cryptocurrency mining into on-demand GPU cloud services, opening up its A new chapter in the field of AI and HPC.
This strategic transformation is in line with the trend of industry development. Similar to other mining companies such as Hut 8, Hive also quickly turned its attention to HPC and AI businesses after Ethereum switched from POW to POS. Today, Hive's HPC and AI businesses are already able to The revenue generated by GPU computing is 15 times higher than that of Bitcoin mining, and the demand for GPU computing is growing rapidly. According to a report by Goldman Sachs, the GPU cloud service market has a bright future. Fortune Business Insights predicts that by 2030, the GPU computing market in North America will account for 1.3% of the total computing power in the United States. The GPU service market will grow at a compound annual growth rate of 34%. Especially as the demand for AI projects continues to rise, the large language model technology behind ChatGPT is just getting started, and almost all companies need a lot of GPU computing power to support these technologies. operation and development.
From an investment perspective, Hive Digital's transformation strategy has laid a solid foundation for its future growth. Although the company still has some layout in the field of cryptocurrency mining, with the rapid development of HPC and AI business, Hive has gradually transformed from traditional It has gotten rid of over-reliance on Bitcoin mining and opened up more diversified and highly profitable income channels.
3. Infrastructure and Solution Providers
Mining machine manufacturing/blockchain infrastructure concept stocks refer to stocks of companies that focus on Bitcoin mining hardware, blockchain infrastructure construction and related technical services. These companies mainly design, manufacture and sell specialized mining equipment. Mining machine manufacturers are at the core of blockchain infrastructure because they provide the hardware infrastructure needed for Bitcoin and other Hardware equipment for cryptocurrency mining. ASIC (application-specific integrated circuit) mining machines are the most common type of mining machines, which are specifically designed for cryptocurrency mining. Mining machine manufacturers' revenue mainly comes from two sources: mining machine sales and Mining machine hosting and cloud mining services .
Generally speaking, the price of mining machines is affected by many factors, including the volatility of the Bitcoin market, the cost of mining machine production, the stability of the supply chain, etc. For example, when the price of Bitcoin rises, the income of miners also increases, and the mining The demand for mining machines usually rises, which in turn drives the revenue growth of mining machine manufacturers. In addition to mining machine production, blockchain infrastructure also includes mining pools, data centers and other cloud service platforms that provide computing power support.
For investors, mining machine manufacturers and blockchain infrastructure companies may provide higher growth opportunities, especially when the cryptocurrency market is in an upcycle. The demand for mining machines and Bitcoin prices are positively correlated, however, this Such companies also face high volatility risks and are affected by multiple factors such as market sentiment, technological innovation, and policy supervision. Therefore, when investing in such concept stocks, in addition to having a positive view of the prospects of the cryptocurrency market, it is also necessary to consider the market Potential risks brought by uncertainty.
1. Canaan Technology (CAN)
Research and development of blockchain hardware products
Canaan Technology was founded in 2013. In the same year, it released the world's first blockchain computing device based on ASIC chips, leading the industry into the ASIC era. Since then, it has gradually accumulated rich experience in chip mass production. In 2016, the mass production of 16nm products marked Since 2018, Canaan Technology has successively achieved the world's first mass production of self-developed 7nm chips, and mass production of self-developed commercial edge intelligent computing based on RISC-V. Chip: K210.
Since its establishment, Canaan Technology has become an important player in the field of blockchain hardware with its leading ASIC mining machine technology and self-developed chips. Compared with other mining machine manufacturers, as a self-produced mining machine, it can increase the mining CAN and BTDR, which are profitable mining machines, have more potential benefits. In the past year, despite the bear market, Canaan Technology's mining machine sales have remained at a high level, especially in the context of the rebound in Bitcoin prices. Sales are expected to increase significantly.
The biggest potential positive factor is the change in the price of mining machines. If the price of mining machines rises - for example, due to unexpected demand or limited supply, the increase in the price of mining machines may lead to an increase in the valuation multiples of mining companies, thus forming a " Davis The " double-click " effect will increase the company's overall valuation. CAN recently signed two important institutional orders, among which HIVE purchased 6,500 Avalon A1566 mining machines, which will further promote its sales and revenue growth, and also show the market's interest in its mining From the perspective of Canaan’s fundamentals and market expectations, the current stock price does not fully reflect its future potential. Assuming that the Bitcoin market picks up and the price of mining machines remains stable or rises, Canaan’s sales revenue and Profits will see significant growth, further driving valuations upward.
2. Bitdeer (BTDR)
Provide cloud mining services and mining machine manufacturing
Bitdeer provides global cryptocurrency mining computing power, allowing users to rent computing resources for Bitcoin mining. The company provides computing power sharing solutions, including cloud computing power and computing power market, and also provides one-stop mining machine hosting services, covering deployment , maintenance, and management to support efficient cryptocurrency mining.
Recently, Bitdeer released its new generation of water-cooled mining machine SEALMINER A2, as the second generation product of SEALMINER series. SEALMINER A2 mining machine is equipped with SEAL02, the second generation chip independently developed by Bitdeer. Compared with A1 series, A2 has better energy efficiency. The A2 series includes two models: air-cooled SEALMINER A2 and water-cooled SEALMINER A2 Hydro, designed to meet the mining needs in different environments. Both mining machines use advanced heat dissipation technology. The power consumption control and computing power performance are optimized to ensure stable operation under high load. According to test data, the energy efficiency of A2 is 16.5 J/TH and the computing power reaches 226 TH/s, which is slightly lower than the mainstream mining machines on the market such as Bitmain and MicroBT's 13.5 J/TH. The company also said that A2 has entered the mass production stage and is expected to increase computing power by 3.4 EH/s in early 2025. Bitdeer also plans to complete the tape-out design of the SEAL03 chip in the fourth quarter, with a target energy efficiency of 10 J/TH.
Overall, Bitdeer is in a critical period of innovation and growth, especially in the field of water-cooled mining machines and computing power sharing. It is worth noting that as a cloud mining platform, it provides computing power leasing and hosting services, not just It is the traditional mining machine sales. Unlike traditional mining machine manufacturing companies, cloud mining and hosting companies are more flexible in capital and resource allocation, and can expand market share by providing users with on-demand computing resources and adapt to investment needs of different sizes. Therefore, while the overall trend of the cryptocurrency market has an impact on Bitdeer’s performance, the diversity and innovation of its business model may allow it to remain relatively stable amid market fluctuations.
3. BitFuFu(FUFU)
Cloud mining services and digital asset management services
BitFuFu is a Bitcoin mining and cloud mining company supported by Bitmain, dedicated to providing cloud mining services to users around the world, allowing users to participate in Bitcoin mining without purchasing hardware. According to the latest third quarter financial report, BitFuFu It holds about $104 million in digital assets, equivalent to 1,600 bitcoins. 340 bitcoins belong to the company, and the rest belong to customers of cloud mining and hosting services. BitFuFu is not only a service provider in the field of bitcoin mining, but also a provider of cloud mining and hosting services. Provider and an important Bitcoin asset manager.
In addition, BitFuFu has reached a two-year credit agreement with Antpool, a subsidiary of Bitmain, with a maximum loan amount of US$100 million. This credit agreement further consolidates the partnership between BitFuFu and Antpool and enhances its capital operation. Flexibility. As the Bitcoin market fluctuates, more and more Bitcoin mining companies (such as MARA and CleanSpark) have begun to adopt financing methods such as Bitcoin mortgages to flexibly use their Bitcoin assets to support business development and capital expansion.
From an investment perspective, BitFuFu has the support of Bitmain and Ant Mining Pool, which gives it unique advantages in hardware supply and computing resources. It can provide BitFuFu with efficient and stable mining equipment and help it optimize its mine operations. Therefore, BitFuFu has obvious technical and resource advantages in the field of cloud mining, which can attract more users and capital to enter.
In general, as the Bitcoin market gradually recovers and the demand for cloud mining increases, BitFuFu will likely benefit from this trend. Compared with traditional mining companies, cloud mining allows investors to participate at a lower cost. Bitcoin mining is especially suitable for users who do not have hardware resources.
4. Exchange Concept:
1. Coinbase (COIN)
Cryptocurrency trading platform, digital currency trading and storage services
Coinbase was founded in 2012 and listed on Nasdaq in 2021. It is the first and only legally compliant listed cryptocurrency exchange in the United States. This status makes it the largest cryptocurrency exchange in the United States by trading volume. At the same time, it has also attracted many institutions to choose it as the preferred platform for custody of crypto assets. Coinbase and Circle jointly issued the stablecoin USDC anchored to the US dollar and expanded diversified businesses such as pledge custody. In addition, Coinbase is also the ARK Invest fund manager Cathie Wood(Cathie Wood)'s core holdings, Cathie has publicly expressed her optimism about it many times.
Coinbase's stock price trend is highly correlated with Bitcoin. For example, its historical high occurred on November 8, 2021, which almost coincides with Bitcoin's historical high (November 10, 2021). On November 21, the stock price bottomed out at the same time as the price of Bitcoin. From the high of $368.9 in 2021 to the lowest point of $40.61, the stock price fell by 89%, and the fluctuation range even exceeded the 78% drop of Bitcoin in the same period, reflecting the Coinbase’s amplified leverage effect in the crypto market.
In the past six months, the fluctuations in Coinbase's stock price have been mainly affected by regulatory pressure and the approval process of the Bitcoin ETF. In 2023, the approval of the Bitcoin ETF was initially considered a major positive, but the market subsequently worried that such products might have an impact on Coinbase's traditional business. The pattern had a diversion effect, causing the stock price to fall back for a time. Nevertheless, the market dynamics after the election brought benefits to Coinbase.
As Trump won the election, his cryptocurrency-friendly policy expectations boosted market confidence, driving Coinbase's stock price up rapidly. The stock price briefly dropped to $185 at the beginning of the election, but eventually soared to around $329. It can be expected that in the U.S. In this relatively closed and compliant crypto market, the Bitcoin investment demand of ordinary investors will continue to benefit Coinbase. As the leading legal exchange in the United States, Coinbase has a relatively solid fundamentals, and its highly compliant identity makes it It has greater advantages when policies are favorable. In the future, as more ordinary investors enter the market, Coinbase may attract large-scale traffic.
2. Bakkt Holdings (BKKT)
Bakkt is a leading cryptocurrency platform dedicated to providing compliant crypto asset custody and trading services to institutional investors. The company holds a crypto asset custody license issued by the New York State Department of Financial Services (NYDFS). The asset custody platform has experienced security incidents, and Bakkt has won trust, especially among institutional clients, with its compliance and strong regulatory background.
Bakkt was originally founded by Intercontinental Exchange Group (ICE) and later spun off into an independent public company, demonstrating the integration of traditional finance and the crypto economy. Recently, Bakkt's stock price has experienced a significant rise, mainly due to Trump's Trump's media and technology group (DJT) plans to acquire Bakkt in full. According to the Financial Times, Trump's company DJT is in in-depth acquisition negotiations with Bakkt. If the acquisition plan is successful, it will further advance Trump's investment in cryptocurrencies. The layout of the currency market will provide Bakkt with financial support and more development opportunities.
Bakkt's stock price soared 162% on the day the news was released, and continued to rise by more than 15% in after-hours trading. DJT's stock price also rose by about 16.7%. In addition, Bakkt's market value before the acquisition was slightly more than $150 million. This valuation is based on the company’s financial performance over the past period and the volatility of the crypto market. Although Bakkt’s revenue did not meet expectations (the company’s revenue was $328,000 and its operating loss was $2.3 billion in the three months ending September 30), the company’s valuation is based on the company’s financial performance over the past period and the volatility of the crypto market. USD 27,000).
From an investment perspective, Bakkt is a company with great potential but still faces challenges. First, Bakkt has unique advantages in compliance and institutional services, especially as institutional investors gradually join the market. Second, Bakkt Bakkt's stock price has risen sharply recently, mainly benefiting from the Trump Organization's acquisition intention. This acquisition will provide Bakkt with more funds and resources, and may accelerate its development in the field of cryptocurrency trading. However, Bakkt's past profit performance The company's main revenue comes from crypto asset custody and trading services, and the growth potential of these businesses remains uncertain. Therefore, when investing in Bakkt, one needs to consider the sustainability of its profit model and the intensity of market competition.
5. Payment concept:
Block ( SQ )
A payment service provider founded in 2009, formerly known as Square. As early as 2014, Square began accepting Bitcoin as a payment method, and has been active in the Bitcoin field since 2018. Since 2020, Block A large amount of Bitcoin was purchased for payment business and as a company asset reserve. Financial report for the third quarter of fiscal year 2024. This quarter, Block's total net revenue reached US$5.976 billion, a 6% increase from US$5.617 billion in the same period last year. Excluding Bitcoin-related revenue, total net revenue increased to $3.55 billion, up 11% year-on-year. Net profit turned from a net loss of $93.5 million in the same period last year to a profit of $281 million, up 402.1% year-on-year.
Square's business has strong application support, good asset reserves, and stable cash flow from its business. It is one of the most stable concept stocks. On this basis, it is affected by the certainty of Bitcoin after Trump's election. Square has achieved a 24% increase in the past two weeks.
As a payment concept stock, you can also pay attention to PayPal. As we all know, PayPal, as a global payment giant, provides digital payment services to merchants and consumers around the world. In recent years, they have also shown a strong interest in the field of blockchain technology. Representative initiatives include the launch of the stablecoin PayPal USD (PYUSD) in 2023. This is an Ethereum-based, dollar-backed stablecoin and is one of PayPal’s core strategies in integrating digital payments with blockchain. The first blockchain investment using PYUSD was to support Mesh, a company focused on digital asset transfer and embedded financial platforms.
In contrast, Block’s focus in the blockchain space is more focused on Bitcoin, integrating it into payment services and company asset reserves.
Summarize:
The demand for blockchain concept stocks is growing rapidly, and may even surpass the demand for traditional technology stocks and cryptocurrencies themselves. As blockchain gradually expands from its initial cryptocurrency applications to a wider range of industry solutions, the market is increasingly looking for related technologies and The demand for infrastructure has also increased significantly. Compared with traditional technology stocks, blockchain concept stocks have more prominent growth potential because they not only rely on continuous technological innovation, but also follow the digital transformation and decentralization trend of the global financial market. Closely related.
As blockchain technology matures and the policy environment improves, the market prospects of blockchain concept stocks will become clearer. Especially in the context of the gradual clarification of regulatory policies on crypto assets by governments around the world, blockchain companies are expected to We expect more traditional industries to start adopting blockchain technology, which will drive technological innovation and market demand in this field.
