Following a broader market rally, Bitcoin (BTC-USD) rebounded to the $65,000 mark. The resurgence could be linked to the softer-than-anticipated jobs report, with experts expecting at least a couple of interest rate cuts this year. Moreover, with the recent BTC halving done and dusted, we could be on the cusp of another bull run. That said, investors will want to consider exposure to these high-potential crypto penny stocks.
BTC has been range-bound between $60,000 and $70,000 in the past couple of months. Hence, BTC’s like a lion in the savannah, biding its time under the shade. Once the consolidation phase is over, expect it to leap like a lion, leading to a major rally in crypto-linked stocks. Here is a dynamic trio of dirt-cheap BTC miners positioned for a potential breakout.
High-Potential Crypto Penny Stocks: Bit Digital (BTBT)
Bit Digital (NASDAQ:BTBT) is an under-the-radar crypto mining play, trading hands for chump change. Despite BTC’s incredible run in the past year, its stock surprisingly ended in the red, losing 50% of its value. It’s down roughly 59% from its 52-week high price of $5.27 and is arguably one of the cheapest BTC miners.
Though its stock has been laggard, it continues to march forward with purpose on the operational front. It was one of the most efficient miners in the second half of last year, mining 70.74 BTC per EH/s. Moreover, it’s been looking to diversify its operations by focusing on becoming an Ethereum-focused treasury while making its foray into the AI market. It plans to set up data centers with robust Nvidia (NASDAQ:NVDA) GPUs, potentially creating a massive new revenue stream for its businesses.
It closed out 2023 with $44.9 million in sales, but analysts anticipate a significant increase of over 50% to $109.2 million this year. I feel these lofty estimates assume an optimistic scenario where Bit Digital can successfully leverage its mining profits and additional new revenue streams. If that’s the case, BTBT stock could offer a tremendous upside.
TeraWulf (WULF)
TeraWulf (NASDAQ:WULF) is another emerging BTC miner that stands out with its ESG-focused approach and financial flexibility. Unlike BTBT stock’s lackluster performance, WULF stock gained roughly 40% last year and more than 130% in the past six months, outperforming the S&P 500. Though these gains may seem excessive, the company’s actions warrant attention.
Over the years, Energy consumption and the environmental effects of BTC mining have been major topics of discussion. However, lately, we’ve seen regulators in the U.S. shifting from discussion to taking punitive measures against the environmental impacts of BTC mining. For instance, President Biden’s budget proposal introduced a new tax on crypto mining energy use. Moreover, state laws are also in flux, with Texas and New York taking significant steps to regulate or curb mining activities due to environmental concerns.
Wulf, though, uses renewable energy sources such as nuclear and other zero-carbon sources to mine Bitcoin. Considering the regulatory challenges facing traditional BTC miners, WULF is in a better position to navigate the headwinds. Moreover, company CEO Paul Prager has commented on the firm’s low-cost status: $25,000 per Bitcoin before the halving and $37,000 after. On top of that, the company has made impressive strides in cutting its debt load by roughly $70 million in the past six months.
Bitfarms (BITF)
Bitfarms (NASDAQ:BITF) is a Toronto-based Bitcoin mining company that surged immensely in value last year. The stock jumped a whopping 68% in 2023 and more than 60 in the past six months. It has been trading in the red of late, following a $375 million at-the-market offering. Its current correction makes it an excellent time to bet on BITF stock before it takes off. Moreover, Wall-Street concurs, expecting an eye-popping 150% upside from current levels.
Bitfarms stands out from its peers with zero debt on its balance sheet and a healthy cash reserve. Since 2020, Bitfarms has seen its cash reserve grow by an extraordinary 1,323% to $84 million. Its financial flexibility is even more impressive considering the volatility in the crypto space.
At the end of last year, the firm boasted a hash rate capacity of 6.5EH/s. It plans to ramp things up to 21EH/s by the end of 2024. There is still plenty of ground to cover, but such an expansion will significantly boost its top-and-bottom-line results. Hence, this backdrop of robust financial health and strategic expansion positions the firm to efficiently capitalize on the dynamic crypto market conditions.
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On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.