Bitdeer Leads in Bitcoin Mining, Analyst Points to Growth Catalysts Including Proprietary Tech and Strategic Data Centers

Rosenblatt analyst Andrew Bond initiated coverage on Bitdeer Technologies Group BTDR with a Buy rating and a price target of $10.5.

The analyst continues to be highly bullish on the Bitcoin ecosystem, of which mining will always be the backbone. 

BTDR began formulating its data center strategy more than ten years ago and has since built more than 30 globally. 

It operates six sites in three countries, with nearly 900MW capacity and 21 EH/s. Bond noted that its blended energy costs will be among the lowest in the space this year, with the option to move even lower. 

Meanwhile, BTDR's ambitious growth strategy is supported by its container-style model and the ability to grow production on its sites, which limits its Capex per MW to about a quarter of the cost of peers. 

Further, Street underappreciates BTDR's differentiated hosting model and proprietary cloud technology. 

They provide a SaaS-like business model, which should drive a higher multiple as it expands, perhaps in the US.

However, mining is a problematic commodity-based business characterized by intense competition, a perpetual need for capital, limited barriers to entry, regulatory scrutiny, energy dependence, and a legacy supplier oligopoly, the analyst said. 

Accordingly, Bond preferred miners with cheap power, revenue and geography diversification, operational efficiency, access to capital, and reputable management teams. 

BTDR meets these criteria and trades at a discount on several metrics compared to peers who spend more on marketing than R&D. 

This focus on R&D has led to a differentiated cloud EH/s vertical, a true AI partnership with Nvidia Corp NVDA, and the development of its own ASICs rig. 

Bond expects fewer public miners as the halving approaches amid record EH/s, network difficulty, and easier access to BTC via spot ETFs.

At the same time, investor focus will shift to quality players like BTDR.

Bond projected first-quarter revenue of $118.3 million and EPS of $0.09.

Bitdeer stock lost 42% in value in the last 12 months. Investors can gain exposure to the stock via First Trust SkyBridge Crypto Industry And Digital Economy ETF CRPT.

Price Action: BTDR shares traded lower by 4.51% at $6.78 on the last check Tuesday.

Also Read: MicroStrategy Positions To Capitalize On Upcoming Bitcoin Halving: Analyst

Photo via Shutterstock