Bitfarms is seriously undervalued and is an excellent buy at current levels. Consider their PH/MC ratio below:
While Bitfarms has officially announced its NASDAQ application approval, we are still waiting on the final listing date to be confirmed.
Mind you the trading symbols will also change in the US to BITF.
The Canadian symbol will remain the same. No changes here (TSX-V).
In this article, I want to quickly talk about Bitfarms stock and the upcoming hashrate increases month-wise and by the end of FY 21. Let’s begin.
Bitfarms 1 Year stock chart:
Bitfarms Stock Price and NASDAQ Approval
As you might know, Bitfarms stock has done extremely well since the NASDAQ announcement and approval, the stock has been on a parabolic run-up. Which is expected. With the recent drop in Bitcoin prices to the low 30s in May, the stock has held pretty well, even during this downfall.
Bitfarms is also the first Canadian miner compared to Hive Blockchain, DMG, Digihost and Hut 8 to reach NASDAQ first. Though all other miners have applied as well.
It’s just that Bitfarms has announced the uplisting first, others will definitely be on NASDAQ by the year’s end. So not to worry here (in case you hold HIVE or Hut 8)
But there’s something interesting and exclusive about Bitfarms, as compared to other Canadian miners. The insane hashrate growth by the end of 21. Let’s talk about this in the next section of the post.
Bitfarms And Hashrate Story
Right now, Bitfarms has a hashrate of 1.42 EH/s.
What that means in layman’s terms is, the company is currently mining around 8 Bitcoins per day.
Quick Math here:
Today’s BTC price is around 40K US (avg).
So that’s 8 BTC*40K=320K per day – cost to mine 1 Bitcoin ($7500, as per their website), leaves us with roughly 250K in profits. But that’s not everything, you need to consider other expenses, such as depreciation (mining equipment), employee salaries etc. Let’s keep it 150K per day at these Bitcoin levels, just to be conservative.
That’s 150K of gross profits*30*12 months = 54M per year.
With the recent 75M share sell, the companies current outstanding shares is 190M, including all the warrants offered.
That leaves us with an EPS of 0.28. (54M/190M shares)
The current stock price, as of today (21st May) is 4.42 US.
Bitfarms Hashrate growth in the coming months:
0.28*25 average P/E leaves us with a stock price of $7. So do not expect to see the stock price 4X-5X once the listing date is announced. There might be a spike up on the day of listing, but it will eventually correct to the forward valuations. I mean the Forward P/E.
Also found this beautiful post by bondbear13 on ST comparing Bitfarms and MARA, as of 21st May valuations:
Thanks To DavidCassedie from ST. As per him Bitfarms currently mines close to 7.81 BTC per day considering the network difficulty and the existing hash rate. He in fact gives the data day-wise for the entire month, which is awesome.
With the NASDAQ application already approved and the date to be announced, the stock can easily 2X from the current levels.
Also, considering the fact that, by the end of FY 21, Bitfarms will have a solid hashrate growth and reach 3 EH/s. That 3X almost from the current hashrate of 1.42 EH/s. Another thing to remember is Bitfarms going to Argentina with the 8 EH/s already confirmed by the company/PR.
So the question remains, is Bitfarms a buy at current levels?
The answer is a definite yes, Bitfarms uses green energy to mine Bitcoins. The miners are all located in Alberta, Canada, where the climate is really good for crypto mining.
I’m also eagerly waiting for the Q1 results on the 26th to better understand the outstanding shares and any news on the NASDAQ uplisting further.
Thanks for reading, please let me know your thoughts and comments below.
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Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master’s degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.