If we are in for the mother of all rallies, small caps could be poised for outsize gains.
Fifteen years since its blockchain network launch, Bitcoin has cemented its position as digital gold. In contrast to the physical limitations of actual gold, Bitcoin’s digital self-custody is fortified by its vast computing network.
Correspondingly, Bitcoin continues to gain ground as a hedge against centralized monetary system mismanagement. The Treasury Department reported a year-over-year increase of 16% in the fiscal year 2024, resulting in a $532 billion deficit and a towering $34 trillion national debt. In response, significant capital has flowed into Bitcoin, driving its price up by 40% over the past three months to $51.2k. However, traditional stock investors may potentially benefit even more from Bitcoin’s ascent through companies supporting the Bitcoin network.
Promising Performers in the Crypto Stock Market
Let’s take a closer look at some crypto stocks that have demonstrated exceptional performance, with one notable exception.
Iris Energy
Over the last three months, Iris Energy Ltd, an Australian Bitcoin mining company, has experienced a remarkable surge of 171%. Bolstered by the Australian government’s green initiatives, Iris has amplified its commitment to powering its data centers with 100% renewable energy. This includes extensive land holdings, electrical infrastructure, and proprietary data centers generating 760 MW of power. Iris Energy is on track to increase its Bitcoin mining output to 10 EH/s by Q2 2024 from the current 5.6 EH/s. The company boasts a total operating capacity of 2,160 MW across its Canadian and Texan facilities.
In addition to its mining efforts, Iris Energy is venturing into generative AI and cloud computing after acquiring 248 Nvidia H100 GPUs. With Bitcoin’s scarcity in mind, Iris Energy is contemplating sustained mining profitability even after the anticipated 4th halving in April.
Notably, Iris Energy has maintained an impressive power usage effectiveness (PUE) ratio of under 1.1, surpassing the industry average of 1.58. Back in September, when the BTC price hovered around $26k, Iris reported a mining revenue, after deducting electricity costs, of $4.9 million from 390 mined BTC.
Based on the input from eight analysts on Nasdaq, IREN stock is labeled as a “strong buy.” The average price target for IREN stands at $9.79, with the high estimate at $10 and the low forecast at $9.5 per share.
Cipher Mining
Compared to Iris Energy’s meteoric rise, Cipher Mining Inc has slightly outpaced the cryptocurrency, with its stock climbing by 6% over the last three months. Specializing in industrial-scale Bitcoin mining in the US, Cipher Mining produced 371 BTC in January 2024, holding a total of 1,132 BTC after selling 34 BTC.
The company’s mining capacity stands at 7.2 EH/s, as indicated in the January operational update. Cipher Mining announced a 60 MW expansion that month and made an additional purchase of 16,700 A1466 mining rigs from Canaan, projecting its capacity to reach approximately 8.4 EH/s by Q2 2024.
Based on the outlook of seven analysts compiled by Nasdaq, CIFR stock is denoted as a “strong buy.” The average price target for CIFR is $6.33, with the high estimate soaring to $8 and the low forecast exceeding the current level at $5 per share.
Greenidge Generation Holdings
Greenidge Generation Holdings Inc, focusing on carbon-neutral Bitcoin mining in Dresden, New York, has met a setback with an 8% decline in its stock over the last three months. However, this dip could be viewed as an opportunity to buy on weakness.
Having restructured its business model to integrate hosting and mining, the company secured $6 million in funding from Armistice Capital in February to facilitate the transformation. Greenidge reported its first profitable quarter in Q4 2023, with operating income ranging from $1.4 to $2.4 million. The company’s revenue of $19.7 million was divided between self-mining at the data center ($7.3M) and hosting ($10.7M). With a total capacity of 3.1 EH/s, 1.2 EH/s is allocated to cryptocurrency mining. During 2023, Greenidge reduced its debt by $85.3 million, now standing at $68.7 million, with $13.6 million in cash reserves.
According to assessments from two analysts on Nasdaq, GREE is classified as a “strong buy,” with an average price target of $20 compared to the current $4 per share.
