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Bitfarms: BITF's Reduced Mining Efficiency And Our Updated Valuation Framework

Oct. 04, 2021 3:16 PM ETBitfarms Ltd. (BITF), BITF:CA77 Comments
Made Easy - Finance profile picture
Made Easy - Finance


  • Our investment thesis was previously built on Bitfarms' green operation, the proposed 5x price target by 2022, and a $100k Bitcoin by 2025, but there are fundamental changes.
  • BITF deviated from its green direction to power its 55% of its operation with natural gas to reduce mining cost, this is a fundamental change in our thesis.
  • Our BITF valuation framework was updated to consider hash rate, the life span of mining rigs, and cost savings from BITF's new operation in Argentina.
  • Based on our assumptions, adjustments made to the valuation framework, and the 8.5%/75% increase in BITF mining cost, BITF is 17% overvalued.
  • Due to additional exposure to operational/business risks given by the increase in BITF's mining cost, we've liquidated our BITF holdings in favor of Bitcoin.

Bitcoin Concept With Binary Codes

Eoneren/iStock via Getty Images


In the previous quarter, we have covered Bitcoin mining companies, including Bitfarms (NASDAQ:BITF) and Marathon Digital Holdings (MARA), extensively with an objective valuation framework. This framework provides investors with a concise intrinsic

Bitcoin network hash rate
Data by YCharts

This article was written by

Made Easy - Finance profile picture
Thesis | Price Targets | Analytics | Newsletters.We're a team of analysts that focus on researching and deploying transparent and easy-to-follow methodology to suggest conservative price targets for companies. We primarily focus on growth companies and cryptocurrency. Value and dividend companies are covered occasionally..Follow us for more timely and short-form updates: Twitter: https://twitter.com/madeeasyfinance Instagram: https://www.instagram.com/madeeasyfinance/

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BTC-USD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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