Summary Bitdeer has shown impressive growth, up 233% since my June “buy” rating, driven by vertical integration and diversification into HPC and AI hosting. Bitdeer stands out with its all-in-one Bitcoin mining model, including self-hosting, cloud mining, ASIC hardware, and hosting services, ensuring year-round revenue. The company is expanding its capacity, targeting 2540 MW by 2026, with significant projects in Norway, Ohio, and Bhutan, aligning with its HPC and AI diversification. Despite high R&D costs, Bitdeer maintains strong short-term liquidity and is poised for revenue growth with the commercial rollout of SEALMINER machines in 2025. Bitdeer ( BTDR) has shown impressive performance in this Bitcoin ( BTC-USD ) market cycle, being one of the new entrants into the publicly traded Bitcoin miner list, having made its market debut just last year. BTDR is up 233% since I last covered it in June with a “buy” rating. My “buy” rating in June was buoyed by the company's vertical integration strategy through the development of its proprietary ASIC mining hardware, known as the SEALMINER. Its steady capacity expansion, and the company's diversification into HPC and AI hosting. Miners' stock price Dec 4 to December 27 (Seeking Alpha) Among the Bitcoin miners, Bitdeer has recently shown a type of momentum that isn't a fluke. Since Bitcoin hit the very important $100,000 psychological level on December 4, Bitdeer has led the gains among publicly traded Bitcoin miners - a stark opposite of when I covered it in June at a time it lagged in YTD gains among miners. Bitdeer is up 47% since Bitcoin crossed that key milestone for the first time. BTDR has defied the Bitcoin-driven volatility that other Bitcoin stocks have been experiencing. Mining peers like Mara Holdings ( MARA ), Riot Platforms ( RIOT ), Hut 8 Corp. ( HUT ), Core Scientific ( CORZ ), IREN Limited ( IREN ), and CleanSpark ( CLSK ) have all recorded negative returns (see the chart above) since Bitcoin decreased from the $100k mark, now trading around $93,000; however, BTDR remains defiant. BTDR is exhibiting the characteristics of a strong growth stock, going to 2025. Strengths for Bitdeer Going Into 2025 The crypto community anticipates 2025 to be a transformative year for Bitcoin and crypto in general. The newly elected U.S. President, if true to campaign promises, will be creating a strategic Bitcoin reserve. And the creation of this reserve is a main catalyst that most Bitcoin investors are hoping for, as this will give Bitcoin more legitimacy and increase demand for the asset. If this happens, the positive effect on well-positioned Bitcoin-linked businesses will be enormous. And how well is Bitdeer positioned going into 2025 to leverage Bitcoin bull market momentum? Here are some factors I’d consider. Bitdeer- The Most Diversified Bitcoin Miner Bitdeer continues to stand out among the miners today both in its operations model and its price chart. As of today, Bitdeer is one of the few miners that can be considered an “all-in-one” provider of Bitcoin mining products and services. Bitdeer has a foothold across all the Bitcoin mining business models - self-hosting, cloud mining, hosting services, ASIC hardware manufacture and sales, and is also diversifying into HPC and AI. This level of diversification will create an all-year-round sales improvement for Bitdeer in 2025. When hosting services demand is low, those resources can be migrated for use in self-hosting. When Bitcoin price takes a dip, revenue from HPC (if it eventually kicks off fully in 2025) could help offset that from mining. The propriety hardware Bitdeer has been building will also be available for commercial sale, opening new stream for revenue for the miner. Expanding Capacity Bitdeer seems ready for all aspects of mining and hosting business, with 895 MW total capacity currently and a target of 2540 MW capacity by 2026. An additional 1,100 MW of power capacity is expected to go online in 2025. The company is advancing the construction of a 175 MW data center in Norway, with approximately 40 MW expected to be operational by the end of 2024. A 221 MW data center is under development in Ohio, with construction anticipated to be completed in 2025. A 500 MW data center project commenced in March this year in Bhutan, with completion expected in mid-2025. The expansion aligns with the company's diversification into HPC and AI. The 1,100 MW of electricity going online in 2025 will accelerate Bitdeer’s hashrate capacity expansion as well as the HPC service. Bitdeer is looking to achieve over 40 EH/s hashrate under management capacity in 2025 with its proprietary SEALMINER machines. Based on the company's latest reports , the SEALMINER A1 is at the mass production stage and commercial sales of the A2 machines will kick off in Q1 next year. 3.7 EH/s of the A1 machines were being mass-produced as of the end of Q3. 0.1 EH/s of the A1 machines is already energized and 0.4 EH/s delivered for installation, as of the end of Q3. Bitdeer's energy capacity expansion and self-mining expansion are progressing on the same timeline. Having both the power capacity and self-mining hashrate deployed at the same timeline means that the new mining machines will be immediately operational once deployed, helping Bitdeer achieve better efficiency. New Sales Pipeline and Solid Short-Term Liquidity Despite weak financials in the most recent quarter (Q3 2024), Bitdeer has managed its balance sheet prudently. In Q3, Bitdeer saw very poor margins. Gross profit was a mere $2.8 million of the $62 million reported revenue - which represented a 4.5% gross margin. Adjusted EBITDA was negative $8.5 million. The financials were hampered by high operating expenses which mainly consisted of R&D costs. The high operating expenses in Q3 were due to R&D costs of $24.8 million related to the one-off development expense of the SEAL02 chip and amortization expense of intangible assets related to acquisition of ASIC design firm Freechain Inc. Bitdeer has managed to keep its short-term liquidity position on its balance sheet attractive, despite the high R&D costs and the effects that the Bitcoin halving has had on its business. Bitdeer still maintains a positive equity position of $520.7 million in the short term, and $291.3 million in cash and 430 Bitcoin held. Data by YCharts Bitdeer’s R&D expenses have truly been on the high side in 2024. But now that the commercial roll-out of the SEALMINER machines and chips is drawing near, there should be an increase in revenue generation and better margins once the machines hit the market. Sales from these machines should be able to offset future operating expenses related to the mining machines production. Demand for the Bitdeer miners is taking an uptrend even before they officially hit the market. As of the end of Q3, around 7 Eh/s of the 35 Eh/s SEALMINER A2s under production for commercial sale have already been reserved by customers. 7 Eh/s represents around 30,000 mining units. While many of our peers have pursued a self-mining hash rate growth strategy, we pursued a more long-term strategy of first focusing resources on the development of our own ASIC technology. We believe this significantly differentiates our business from the rest of the sector in terms of our strategic positioning, revenue and cost structure. Q3 earnings call Risks While Bitdeer's short-term liquidity position looks good, last month Bitdeer added leverage to its long-term liquidity position by issuing $360 million in convertible notes bearing an annual interest rate of $5.25%. Though this strengthens Bitdeer's ability to fund expansion and growth initiatives, this new debt has increased Bitdeer's financial risk because the crypto market remains volatile, and overnight events that can turn the market highly bearish should not be ruled out. Any time a miner takes on debt, it presents fresh risks. Takeaway SEALMINER Roadmap (Bitdeer) Bitdeer has followed through with the SEALMINER roadmap. And the company's entry into the ASIC market, currently valued at around $10 billion, will change the financial and market standing of Bitdeer in 2025. BTDR is a Bitcoin mining stock to watch out for in 2025. Verified Market Research Bitdeer is entering into the ASIC equipment manufacturing sector with mining machines that will go head-to-head with those of the leading players in the space. Bitdeer’s SEALMINER A2 machines, utilizing the more efficient SEAL02 chips, have undergone testing. The tests conducted in October showed the SEALMINER A2 achieved 226 th/s and an efficiency of 16.5 joules per terahash. The stat is impressive and is on par with what is obtainable from the most popular miners currently in the market, from manufacturers like Bitmain and Canaan. I wish you a happy and bullish new year in advance.
