3 cryptocurrency mining stocks that are hidden gems of the market

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Here are a few reasons why you should pay attention to cryptocurrency mining stocks:

  • Bitfarms (BITF): This company is in the process of actively expanding its bitcoin mining capacity and also has significant financial flexibility, allowing it to scale efficiently.
  • Cipher Mining (CIFR): The company has aggressive expansion plans backed by a strong financial balance sheet, which could lead to stable cash flows in the future.
  • HIVE Digital Technologies (HIVE): In addition to bitcoin mining, HIVE is looking to expand into various areas including GPUs, cloud computing, and artificial intelligence, which could create additional growth and diversification opportunities for the business.

Crypto mining stocks

It seems that the next 24-36 months will bring with it a new round of bull market for cryptocurrencies. During this period, direct access to bitcoin (BTC-USD) and other quality altcoins could be the key to multiple returns. Investors can also consider indirectly participating in the cryptocurrency bull market. One way is to buy shares of fundamentally strong crypto mining companies.

Some of the top bitcoin miners have experienced a very volatile 2023. However, their uptrend was synchronised with the rise of bitcoin. With the emergence of bitcoin spot ETFs and the upcoming halving event, the crypto asset is expected to show growth this year. The flurry of potential expansionary monetary policy will only add fuel to the fire.

Now is the present moment to consider investing in some of the best crypto mining stocks. Some of these companies, such as Riot Platforms (NASDAQ:RIOT) and Marathon Digital (NASDAQ:MARA), are attracting a lot of attention. In this article, we'll take a look at crypto mining stocks that could prove to be real hidden gems.

Bitfarms (BITF)

Shares of Bitfarms (NASDAQ: BITF) represent one of the penny stocks in cryptocurrency mining that could deliver impressive five-fold gains if bitcoin hits new all-time highs. BITF stock is up 91% over the past 12 months, but there has been a significant correction from recent highs of $3.56 to the current level of $2.1. There's a great opportunity for new investments in this one.

It should be noted that Bitfarms reports a hashrate throughput of 6.5 EH/s by December 2023, and plans to increase this to 17 EH/s. There is also the potential to increase throughput to 21 EH/s by reallocating capacity. This suggests that Bitfarms is poised for significant growth and increased cash flow if bitcoin's growth continues.

Additionally, it should be noted that Bitfarms has a total liquidity reserve of $118 million and the company will be debt-free next month. This demonstrates that the company has enough financial flexibility to expand sustainably. Strong cash flows will add flexibility for further growth beyond 2024.

How much are shares of Cipher Mining worth?

Cipher Mining (CIFR)

Shares of Cipher Mining (NASDAQ: CIFR) are up 108% over the past 12 months. However, thanks to its ambitious expansion plans, we are confident of further growth for CIFR stock. Naturally, the key factor is bitcoin maintaining its uptrend. It should also be noted that short positions in CIFR stock stand at 23%. We may see short positions grow in the near future.

As for expansion, Cipher Mining has claimed a capacity of 7.2 EH/s as of December 2023. With expansion plans (including call options), the capacity is likely to increase to 24.2 EH/s. This will allow the company to prepare for aggressive growth over the next 24 months. That said, if bitcoin continues to trade near historical highs, this will result in significant free cash flows.

It should be noted that Cipher will have $120 million in liquidity by December 2023, given the value of bitcoin assets. In addition, the company's lack of debt provides it with high financial flexibility, which will allow it to continue expanding beyond this year.

HIVE Digital Technologies (HIVE)

Shares of HIVE Digital Technologies (NASDAQ: HIVE) have remained in a sideways trend over the past 12 months. However, this crypto mining company that has been in the shadows is expected to make an upward breakout soon, supported by positive business developments.

As of Q2 2024, HIVE has reported a hash rate performance of 4.3 EH/s, and plans to increase it to 6 EH/s this year. With an attractive cost profile, we expect high EBITDA margins in the event of bitcoin growth. Last quarter, the company reported a gross operating margin of 21%.

Another reason to be optimistic about HIVE is that the company is not just limited to bitcoin mining. HIVE Digital is also actively pursuing the areas of artificial intelligence, cloud computing, and the use of GPUs. As the company expands its operations, the opportunities for growth become even wider. We would not be surprised if HIVE starts exploring the application of blockchain technology in various industries in the coming years, which could also be an additional catalyst for the stock's growth.

How much are shares of HIVE Digital Technologies worth?

Conclusion

Investing in crypto mining stocks could be an attractive way to gain indirect exposure to the cryptocurrency market, especially with bitcoin's impending halving and potential price appreciation.

Bitfarms (BITF), Cipher Mining (CIFR) and HIVE Digital Technologies (HIVE) are just a few examples of crypto mining stocks worth considering.

However, it is important to remember that investing in cryptocurrency involves a high level of risk.

FAQ

Which cryptocurrency mining stocks are currently attracting particular attention from investors?
At the moment, stocks such as Riot Blockchain, Marathon Digital Holdings and Bitfarms are attracting particular attention.
What factors can influence the price of cryptocurrency mining stocks?
The price of cryptocurrency mining stocks may depend on the price of cryptocurrency, the efficiency of mining operations, changes in legislation and regulation, and the general economic environment.
What are the advantages of investing in cryptocurrency mining stocks compared to investing in cryptocurrencies themselves?
Investing in cryptocurrency mining stocks allows you to gain exposure to the cryptocurrency market through portfolio diversification, and allows you to benefit from the growth of cryptocurrency without having to purchase it directly. In addition, cryptocurrency mining companies may have additional revenue streams such as cloud mining services or the sale of mining equipment.
Jonathan Rowe

Jonathan Rowe

The creator and main author of the site is Jonathan Rowe. Trader and investor with many years of experience. A graduate of the Massachusetts Institute of Technology with over a decade of experience developing applications for financial and investment institutions.

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