Bitcoin Stocks Under $5 with Strong Buy Ratings and Triple-Digit Upside Potential
Cryptocurrencies, notably Bitcoin, have captured the attention of traders, speculators, and investors alike. Bitcoin, the leading digital currency, currently trades at around $26,550 per coin, marking a significant 60% increase year-to-date. The future prospects for Bitcoin appear promising, with a strong upward trajectory expected over the next year.
One key driver of Bitcoin's potential growth lies in its algorithm, which includes a built-in halving mechanism. This mechanism reduces the rewards granted to miners for solving blockchain puzzles by half, occurring approximately every four years. The next Bitcoin halving is anticipated in May 2024. Historical data suggests that Bitcoin halvings have a positive impact on the digital currency's price and can also influence the share prices of Bitcoin-related stocks.
This presents an opportunity for investors to enter the market early. The predictability and regularity of Bitcoin halvings make this an ideal time to explore Bitcoin-related stocks, seeking an attractive entry point well in advance of this pivotal event. Wall Street analysts have identified solid investment options among Bitcoin mining companies, anticipating potential price increases.
In this article, we examine two Bitcoin mining stocks, each priced under $5 per share, that have garnered 'Strong Buy' consensus ratings. Furthermore, some analysts project triple-digit upside potential for these stocks over the coming year. Let's dive into the details.
Bitfarms, a Bitcoin mining company headquartered in Toronto, Canada, operates 11 Bitcoin mining facilities (referred to as "farms") across four countries. The company boasts an impressive deployment of approximately 56,200 mining rigs, generating an average of 12.4 Bitcoins per day. Bitfarms has a hashrate of 5.6 EH/s.
Power is essential for Bitcoin mining, and Bitfarms manages large-scale power generation facilities to support its data center operations. With plans for 240 megawatts of power generation and a recent announcement of a 50 megawatt deployment plan in Paraguay for hydroelectric power generation, Bitfarms is expanding its power infrastructure.
Bitfarms has also expanded its operations in Argentina, adding 3,150 modern mining rigs to its Rio Cuarto facility, with more deliveries scheduled for installation.
In its 2Q23 financial report, Bitfarms disclosed mining 1,223 Bitcoins during the quarter and an increased hashrate of 5.3 EH/s by June 30, up 10% from Q1. By August, the hashrate had grown to 5.6 EH/s, demonstrating the company's expansion. Bitfarms aims for a hashrate of 7.0 EH/s in the first quarter of the next year.
Cantor Fitzgerald analyst Josh Siegler highlights Bitfarms' progress and potential, emphasizing the company's strong balance sheet, higher visibility in Argentina, and improved cash expenses. Siegler's $3 price target implies an impressive 168% upside potential over the next 12 months.
The Street's consensus is unanimous, with all recent analyst reviews rating Bitfarms as a Strong Buy. The stock currently trades at $1.12, with an average price target of $3.67, indicating a bullish potential for a 228% gain over the coming year.
Cipher Mining is a US-based Bitcoin mining company with a primary mining facility in Odessa, Texas. The facility became operational in November of the previous year and is set to complete construction by the end of the current quarter. Cipher's total Bitcoin mining hashrate is expected to reach 7.2 EH/s. As of 2Q23, the company reported a total hashrate of 6.8 EH/s.
In addition to its primary facility, Cipher operates two wind-powered mining facilities in Texas, with capacities of 40 and 20 megawatts. These sites have a combined deployment of 68,000 miners and the potential to mine up to 16.1 Bitcoins per day.
Cipher's recent production update for August revealed the mining of 357 Bitcoins. While this marked a 15% month-over-month decrease, the company retained an account balance of 519 Bitcoins after selling 355. With an estimated Bitcoin price of $27,000, this holding is valued at over $14 million.
Cipher is actively expanding its power generation capacity, which has garnered attention from BTIG analyst Gregory Lewis. Lewis notes the company's potential as a net-seller of electricity and highlights Cipher's low-cost fixed-price power purchase agreement. His Buy rating and $6 price target suggest a potential one-year gain of 124%.
The Strong Buy consensus rating is unanimous among analysts, with a $5.25 average price target indicating a 96% increase from the current share price of $2.68.
In the quest for stocks with promising valuations, consider exploring Bitcoin mining companies with 'Strong Buy' ratings and significant upside potential. These companies present opportunities for investors looking to capitalize on the Bitcoin growth story.