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In my opinion, the next 24-36 months will be another big bull market for cryptocurrencies. Direct exposure to Bitcoin ( BTC-USD ) and high-quality altcoins can deliver significant returns during this period. Meanwhile, investors can consider participating in the cryptocurrency bull market by proxy. One solution is to buy strong cryptocurrency mining stocks.
It should be noted that some of the major Bitcoin miners in 2023 are volatile. Naturally, the uptrend was consistent with Bitcoin's uptrend. Given the Bitcoin ETF situation and the upcoming halving event, I expect the cryptocurrency assets to rise this year. Perhaps expansionary monetary policy will add fuel to the fire.
So, this is a good time to consider buying some of the best cryptocurrency mining stocks. Relatively big names like Riot Platforms (NASDAQ: RIOT ) and Marathon Digital (NASDAQ: MARA ) are in the spotlight. This column focuses on the hidden gems of cryptocurrency mining.
BitFarms (BITF)
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Bitfarms stock (NASDAQ: BITF ) is one of the cheapest cryptocurrency mining stocks promising 5x returns, with Bitcoin trading at new all-time highs. BITF shares are up 91% in 12 months. However, there is a significant correction from the recent high of $3.56 to the $2.1 level. I see it as a great opportunity to make new connections.
It should be noted that BitFarms reported a hashrate of 6.5 EH/s as of December 2023. The company plans to increase its throughput to 17 EH/s. Additionally, with redistribution, the rate can increase to 21EH/s. As such, Bitfarms expects excellent growth and cash flow growth potential, assuming Bitcoin continues to rise.
I should add that Bitfarms' total liquidity is $118 million. The company will also be debt-free next month. Therefore, financial flexibility is sufficient to ensure sustainable expansion. Strong cash flow adds flexibility to accommodate growth beyond 2024.
Cryptocurrency Mining (CIFR)
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Cipher Mining (NASDAQ: CIFR ) shares are up 108% in the past 12 months. However, given its strong growth plans, I am optimistic about CIFR stock's continued growth. Of course, the main assumption is that Bitcoin will remain at a high level. It should also be noted that the short interest rate on CIFR is 23%. A strong recovery seems likely in the future.
In terms of growth, Sipper Mining reported a result of 7.2 EH/s in December 2023. Expansion plans (including purchase options) are expected to increase capacity to 24.2 EH/s. So the company is poised for tremendous growth over the next 24 months. This results in strong free cash flow if Bitcoin trades at all-time highs.
Per year It should be noted that as of December 2023, Cipher reported a cash flow of $120 million based on the value of Bitcoin assets. Additionally, the company, which has no debt, has plenty of cash flow to continue expanding beyond this year.
Digital Technologies for Human Immunodeficiency Virus (HIV)
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Shares of HIV Digital Technologies (NASDAQ: HIV ) have been sideways over the past 12 months. A bull run seems inevitable for this crypto cryptocurrency – positive trade developments support my view.
In Q2 2024, the HIV hash rate was 4.3 HEH/s. This year, the company plans to increase production to 6EH/s. Given the interesting cost profile, I expect good EBITDA margins if Bitcoin continues to grow. The company reported a gross operating margin of 21 percent last quarter.
Another reason to like HIV is that the company wants to expand beyond Bitcoin mining. Digital HIV also runs on AI, HIV Cloud, and GPUs. As the company spreads its wings, I hope its growth is not limited to Bitcoin mining. I would not be surprised if in the coming years HIV explores the application of blockchain technology in various industries.
As of the date of publication, Faisal Humayun does not accept any liability (direct or implied) for the warranties mentioned in this article. The opinions expressed in this article are those of the author and adhere to InvestorPlace.com's publishing guidelines .
Faisal Humayun is a Senior Research Analyst with 12 years of experience in credit research, equity research and financial modeling. Fasil has authored more than 1,500 articles covering the technology, energy and materials sectors.
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