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 big 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 12 months.
“After the mixing and growth of Stronghold’s belongings, Bitfarms will probably be poised to greater than triple whole 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 whole 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 progress of 35 EH/s by the tip of 2025, a goal Bitfarms had set earlier than asserting the Stronghold acquisition.
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 big improve to the mining agency’s fleet and potential natural progress.
The analyst has reiterated a purchase score for BITF, with a $4 value goal. The Bitfarm inventory at present trades round $2.28, which means 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 price modifications, and the potential for shareholder dilution.