Investment banking firm Benchmark has recently initiated coverage on Bitdeer Technologies Group, a Bitcoin mining company spun out from the Chinese parent company Bitmain. Analyst Mark Palmer, in a note dated March 14, disclosed that Benchmark has assigned a buy rating to Bitdeer, accompanied by a $13 price target. Palmer emphasized Bitdeer's competitive edge, noting that it boasts one of the lowest average electricity costs, standing at approximately $0.04 per kilowatt-hour, among listed mining companies.
Palmer justified the buy rating by highlighting Bitdeer's strategic expansion plans, significant self-mining operations, and recent ventures into artificial intelligence. He outlined a bullish outlook, projecting a price target for 2025 that is double the current price. Palmer expressed confidence in Bitdeer's growth prospects, citing a substantial gap between its discounted valuation and the anticipated trajectory of the company.
Bitdeer's shares are currently trading at $6.46, registering a decline of 7.6% for the week and 13.8% for the month, according to data from Google Finance. Despite the recent dip in share price, Bitdeer maintains its position as the seventh-largest cryptocurrency miner by total market capitalization, valued at $768 million as of the latest available data.
However, not all market analysts share the same optimism regarding Bitcoin mining companies, particularly in anticipation of the upcoming Bitcoin halving scheduled for late April. The halving event will halve the Bitcoin-denominated rewards received by miners, potentially impacting profitability. Cantor Fitzgerald published a report on January 26 warning that several mining companies may face challenges in maintaining profitability post-halving.
The apprehension surrounding mining companies' profitability was reflected in the sharp decline in share prices of industry players like Marathon Digital and Riot Blockchain, which fell by 33% and 34% respectively in the previous month. Analysts suggest that investors may be exercising caution in light of the impending halving event, given its potential implications for mining revenue. Bitdeer, however, remains optimistic about its future prospects, recently announcing successful preliminary tests of its new 4-nanometer Bitcoin mining chip, SEAL01, boasting improved power efficiency.
