Benchmark And Needham Initiate Coverage On Bitdeer Technologies (NASDAQ: BTDR) And Apply 'Buy' Recommendations

June 11, 2024 at 08:30 AM EDT

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By Austin DeNoce, Benzinga

As the Bitcoin mining industry weathers the recent Bitcoin halving, interest in key players like Bitdeer Technologies Group (NASDAQ: BTDR) is intensifying. This period, marked by a halving of the rewards for mining Bitcoin, historically triggers volatility and reevaluation within the sector. Amidst this backdrop, a number of prestigious investment banks – Roth/MKM, B. Riley Securities and BTIG – initiated coverage on Bitdeer with bullish Buy ratings, signaling a strong vote of confidence in the firm's potential. Most recently, Benchmark and Needham joined this chorus of optimism, further spotlighting Bitdeer as a standout investment in the competitive Bitcoin and high-performance computing (HPC) sectors.

Benchmark's Bullish Outlook On Bitdeer

Benchmark's initiation of coverage on Bitdeer comes with a Buy rating and a $13 price target, representing a more than 80% gain from the current price of just over $7. This lofty outlook suggests a significant undervaluation of the company’s growth prospects. Analyst Mark Palmer points to Bitdeer's scalable infrastructure, notably low all-in mining costs and a diverse range of revenue streams, as critical components of its attractiveness. These revenue streams include self-mining and hashrate sharing, a recent foray into AI and HPC solutions and advanced mining rig manufacturing. Bitdeer's strategic shift toward self-mining, in particular, positions it to capitalize on Bitcoin's price fluctuations more directly, with plans to double power capacity to substantially increase its hashrate. However, Bitdeer's endeavors in the AI and HPC sectors also signal its ambition to capture share in new markets, reinforcing its potential for growth in the coming years.

Needham Bullish Outlook On Bitdeer

Following Benchmark's lead, Needham likewise initiated coverage on Bitdeer with a Buy rating, forecasting more than 140% upside potential with a target price of $13.94. This bullish perspective is underpinned by projected annual revenue growth of 3.51% to $381 million and anticipated bearings per share of $0.44. Needham’s positive stance is also bolstered by Bitdeer’s strong institutional backing, evidenced by a 14.89% increase in fund holdings despite a slight overall dip in institutional shares. Noteworthy stakeholders include Nomura Holdings (NYSE: NMR) and Van Eck Associates, which have significantly increased their holdings, demonstrating growing investor confidence in Bitdeer’s strategic direction and market positioning.

The Importance Of Mining Efficiency Post-Halving

While the recent Bitcoin halving generally focused investors on price predictions, it has very serious implications for miners, who now see their block rewards cut in half. This harsh reality underscores the importance of mining efficiency, an area where Bitdeer seems notably well-positioned.

As highlighted by Benchmark, Bitdeer has one of the industry's lowest "all-in mining costs,” benefiting from an average power cost of around $0.04 per kilowatt hour. This will allow Bitdeer to remain competitive and profitable even as the halving reduces miner rewards. This efficiency, coupled with aggressive expansion plans and technological advancements like its new SEAL01 4-nanometer mining chip, which boasts superior power efficiency, will be major factors in Bitdeer's resilience and growth potential, especially as other less-efficient miners fall by the wayside post-halving.

A Bright Future For Bitdeer?

The landscape for Bitcoin miners remains fraught with uncertainty and a firm focus set on operational efficiency in a post-halving world. In that context, Bitdeer appears to be a compelling player within the industry, buoyed by a confluence of strategic advantages from cost efficiency and technological innovation to a diversified and expanding business model.

The increasing optimism from leading investment banks, punctuated by Benchmark’s and Needham's coverage, paints a picture of a company poised not just to navigate the challenges of the Bitcoin mining industry but to thrive and expand its influence in the years to come. Bitdeer's positioning suggests it is well positioned among its peers, and clearly, more of the investment community is taking notice.

Featured photo by Kanchanara on Unsplash.

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