Written by: Cycle Trading
Event: Bit Deer (Btdr.US) released its first quarter report for fiscal year 2025. The company achieved operating revenue of $70.1 million in the first quarter, a year-on-year decrease of 41.3% and a quarter-on-quarter increase of 1.6%. Among this, self-operated business revenue was $37.2 million, a year-on-year decrease of 10.4%; the comprehensive gross profit was negative $3.2 million, with a gross profit margin of -4.6%, mainly due to electricity price increases during Bhutan's dry season and the temporary closure of Bhutan mining farms, but in the second quarter during the rainy season, electricity prices have returned to $0.042/kwh; Seal mining machine sales were $4.1 million, marking the official start of mining machine sales. Adjusted EBITDA was negative $56.1 million, compared to positive $27.3 million in the same period of 2024. Net profit was $410 million, primarily due to the fair value reversal of convertible notes ($448.7 million) and Tether options ($58.4 million) in the fourth quarter of 2024.
Commentary:
1. Bit Deer's prepaid accounts in Q1 2025 further increased to $382 million (from $310 million in Q4 2024), fully covering the amount needed for the maximum wafer production. Seal02 mining machines have entered the shipping phase, and subsequent self-operated and sales rhythm will depend on competitors' pricing strategies, prioritizing lighting up self-operated mining farms if competition is intense; Seal03 mining machines also completed wafer production in the first quarter and are currently in the testing phase, expected to officially enter self-operated mining farm deployment and sales in Q3 or Q4 of 2025.
2. Regarding the US tariff war, Bit Deer will complete the North American assembly plant in the second quarter, after which North American sales will come from local assembly. Although costs have increased by nearly 10%, it is almost negligible compared to current Southeast Asian tariffs. The Southeast Asian assembly plant will meet the needs of mining farms in non-US regions.
3. Bit Deer's global power infrastructure construction remains rapid, with available power capacity expected to approach 1.6GW by the end of the second quarter and reach 1.8GW by the end of this year.
4. As of April, Bit Deer's self-operated mining farm hash rate reached 12.5Eh/s, expected to rise to 40Eh/s in October, and projected to exceed 40Eh/s by the end of 2025. The latest Seal01 and Seal02 mining machines went online in self-operated mining farms in March, but the overall mining cost is still at least 20% lower than peers (including Mara, CLSK, etc.). After fully replacing old mining machines, the cost advantage will become more apparent, with monthly output expected to show exponential growth starting in the second quarter.
Investment Recommendation: Bitcoin price has recently returned to an upward trend, potentially breaking through the previous historical high of $109,000 per coin. Since the US trade war, the US dollar has been under pressure, and Bitcoin, as an alternative asset, is beginning to show its gold-like hedging attributes. The Federal Reserve has recently begun to adopt an "average inflation" policy, likely to cut rates as early as June, with expected annual rate cuts increasing to three (previously one), which will provide positive support for Bitcoin prices. After experiencing the operational transition period in the fourth quarter of last year and the first quarter of this year, Bit Deer will usher in an important moment. The speed of mining machine R&D and self-operated mining farm activation will be key focus points in the coming quarters. The first quarter of 2025 may be the worst operating period in the next two years, and the operational turning point will begin from here, making it still the best choice among North American Bitcoin mining stocks.
Investment Risks: Further adjustment risk of Bitcoin prices, risk of TSMC wafer production not meeting expectations, risk of slower self-operated mining machine online speed than expected.
