H.C. Wainwright analyst Mike Colonesse described Bitfarms’ settlement to amass Stronghold Digital Mining as “a transformational acquisition.”
The analyst commented on the Bitcoin (BTC) miner’s potential to learn from the Stronghold acquisition in a be aware shared with crypto.information on Aug. 22. It comes a day after Bitfarms’ announcement on Aug. 21.
Colonesse views the $125 million all-stock deal for Stronghold as a major alternative for Bitfarms to increase its operations considerably over the following 16 months. When finalized within the first quarter of 2025, Stronghold’s energy capability will allow Bitfarms to method 1 gigawatt of energy by the tip of the yr.
“After the combination and growth of Stronghold’s property, Bitfarms will probably be poised to greater than triple complete capability to 955 MW by YE2025, up from 310 MW working on the finish of 2Q24,” the analyst wrote.
Moreover, the deal is anticipated to extend Bitfarms’ U.S. footprint to roughly 47% of its complete portfolio, up from the present 6%. The growth of Stronghold’s websites in Pennsylvania may additionally contribute an extra 23 EH/s to the anticipated development of 35 EH/s by the tip of 2025, a goal Bitfarms had set earlier than asserting the Stronghold acquisition.
Learn extra: Bitfarms publicizes management modifications amid takeover try
Reiterate purchase with $4 value goal
Given the above outlook, H.C. Wainwright believes the Bitfarms inventory is undervalued. The important thing catalysts for 2025 embody a major improve to the mining agency’s fleet and potential natural development.
The analyst has reiterated a purchase score for BITF, with a $4 value goal. The Bitfarm inventory at present trades round $2.28, which suggests a 75.4% upside potential. BITF rose 22% after Bitfarm’s Q2, 2024 outcomes.
Components which will affect the achievement of this value goal embody volatility in Bitcoin’s value, operational delays, community hash fee modifications, and the potential for shareholder dilution.
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