It's been some time since I last posted anything, so here's an article on my favourite Bitcoin miner, CLSK ππ
Putting a few articles together to summarise the following points:
π©· CLSK is the most undervalued Bitcoin miner (relative to other miners), exhibiting strong network share growth and best-in-class cost basis.
π©· For those bullish on BTC and it's derivatives, exposure to Bitcoin miners could be one of the ways to ride the BTC wave up. It is typical for BTC to be low in the months of Sept / Oct, but BTC will generally trend up in Nov / Dec. As such, current prices could present good entry points into miner stocks for those keen.
π©· CLSK's growth remains impressive, which warranted its most recent run-up, alongside the largest Bitcoin miner, MARA. IREN has quite good price action too, but my focus is on BTC Miners within USA because should Trump wins the presidential election this year, American BTC miners are bound to get further support / boost.
Fig 1 illustrates the normalized changes in network share of BITF, CLSK, Marathon Digital Holdings (MARA), and Riot Platforms (RIOT) since 2021Q3. Chart courtesy of Seekingalpha.
π©· The interpretation of the graph is simple, the values represent the cumulative changes of a miner's network share based on its initial network share in 2021Q3. It is observable that among the 4 Bitcoin miners, CLSK is growing well, gaining 52% more network share compared to 3 years ago. As a result, we see CLSK's Bitcoin production increase steadily (the 2024Q2 dip is caused by halving).
π©· CLSK has grown from a $~200M company to a multibillion company over the past several years. AND THAT'S IMPRESSIVE!! ππ
π©· According to CLSK's founder and executive chairman, Matthew Schultz, CLSK authorised shares from 100M to 300M several years ago, and they are still not at the 300M level yet. Unlike other miner stocks like MARA and RIOT that agressively dilute shareholders to create liquidity.
Fig 2. Normalized Bitcoin Network Share Changes Since 2021Q3 (BITF, CLSK, IREN, MARA, RIOT). Graph courtesy of Seekingalpha.
π©· This metric looks good and all, but it doesn't capture future network share. For this, we'll look at what the company guided within 1 year (by the end of 2025). The table below represents each miner's current capacity as of the latest monthly update and their respective guidance. CLSK's latest known capacity stands at 26 EH/s, which HAS ALREADY exceeded its guidance (20 EH/s) by 2024H1 ππ
π©· CLSK guided a 50 EH/s if it fully exercised its full option to buy the mining rigs from Bitmain (no timeline was given to achieve this target yet though). IREN is set to increase current capacity by 88% (from 16 EH/s to 30 EH/s) by 2024Q4, while RIOT guided ~5x increase (from 23.3 EH/s to 100 EH/s) by 2027 (not including the hostile takeover of BITF). This post is about CLSK and not IREN / RIOT, so I won't be talking too much about the other 2 and why my preference is still CLSK.
Table 1. Potential Capacity Growth Potential Based on Latest Guidance and Latest Known Capacity. Table courtesy of Seekingalpha.
The table above ccontains the estimation and actual cost basis post-halving (2024Q2).
Table 2. All-in cost basis per Bitcoin. Courtesy of Seekingalpha.
π©· In CLSK's case, we can see that CLSK is more efficient than other miners by a mile. The synergy between a strong Bitcoin production prospect and a well-controlled cost basis cannot be understated. This synergy will eventually translate into higher profitability which translates to higher Bitcoin retention, lower shareholder dilution, and/or lower debt, all are constructive to higher valuations. Perhaps this is also the reason why CLSK is relatively the MOST UNDERVALUED compared to other mining peers.
π©· That being said, the $73k cost basis is still too high to produce Bitcoin profitably. Note that Bitcoin is now trading in the sub $60k price level. Given this context, some investors may wait for Bitcoin to head above $70K before having sizable exposures in miners. However, do note that when Bitcoin eventually heads above $70K, investors would not be able to grab miner stocks at the attractive prices seen today.
In recent news:
CLSK's August BTC mining update. RIOT mined 322 BTC, MARA mined 673 BTC. Image courtesy of CLSK.
Image courtesy of CLSK.
π CleanSpark (CLSK) said Wednesday, 11 Sept, that it has agreed to acquire seven bitcoin mining facilities (acquisition to close by Sept 25) in Tennessee for a total of $27.5 million in cash.
π CLSK said that it expects the new facilities to increase its current hashrate by more than 22%. It said the seven sites total 85 MW and range in size from 10 MW to 20 MW, and that it now expects to reach 37EH/s by the end of the year.
π CleanSpark (CLSK) said Thursday, 12 Sept, that it has energized the 50 megawatt final phase of its 150 MW expansion project in Sandersville, Georgia.
π The bitcoin mining company said recent expansions totaling 65 MW of capacity have boosted its hashrate by 3.2 exahashes per second, or EH/s, pushing it beyond 26 EH/s in its latest update.
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I remain invested in Bitcoin on Coinbase and have positions in both MARA and CLSK. For those who are skittish, you may wanna wait for signs of a Bitcoin bull run before increasing exposure to miners like CLSK. It is always impossible to bottom fish because we cannot tell which point is the bottom exactly, leading to missed opportunities.
For those who have some spare cash sitting around, you may wanna hop on the CLSK boat and ride it up!! ππ
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The target price for CLSK ranges from $23 to $30; a 242% to 315% increase from its current share price of $9.50. CLSK has surge +275% in 2 months, THRICE in the past 18 months. When BTC reaches new ATH, CLSK is bound to make waves!! π«Άπ«Ά
π HC Wainwright & Co. Reiterates Buy on Cleanspark, Maintains $27 Price Target.
π Cantor Fitzgerald Maintains CleanSpark(CLSK.US) With Buy Rating, Raises Target Price to $28.
π Bernstein analysts maintained an Outperform rating on CLSK with a $30 price target.
AI Generated images featuring CLSK mining facilities. BTC and CLSK ftw!! ππ
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Comments
Huat! ππππππππππππππ₯π₯π₯π₯π₯π₯π₯π₯π₯π₯π₯π₯π₯Cheers, BC π
Reposting this well-written article! CLSK is indeed undervalued at the moment, get on the boat now! I'm into IREN at the moment, another company with great fundamentals and huge potential upside! [Cool] [Cool]
Great article, would you like to share it?