CA - CleanSpark Share Price Surge: Hype Or Value? Market Timing Is Never Easy

2024-06-13 12:09:57 ET

Summary

• CleanSpark delivered over 600% share price growth in 4 months, they have to be worth a look.
• CleanSpark has outperformed Bitcoin and other miners, but questions remain about the sustainability of their performance and market timing strategies.
• CleanSpark's focus on efficiency, market timing, and aggressive expansion through acquisitions present both bullish and bearish risks for investors.

During 2023, I was a big buyer of Bitfarms (BITF). I chose them after analyzing several miners (writing about Hut 8 Corp (HUT), , Hive Digital Technologies ( HIVE ), Cipher Mining ( CIFR ) and Bitfarms ( BITF ) ). BITF turned out to be a great choice, returning over 100% on two occasions and 25% on the third.

Things are changing, and I have decided I need a new miner to replace Bitfarms in my portfolio. The CEO and driving force behind everything I liked about Bitfarms has left in acrimonious circumstances , and they are being circled by acquisition orientated companies.

I began a search for a new miner restricted to those with a market cap over $1 billion. The industry is maturing, and the halving has reduced the rewards miners get for their operations, making the industry even more competitive than it was. In this new reality, I think size is going to matter, I expect a lot of smaller miners to have trouble surviving the halving, and any without the most efficient operations may be squeezed into an unprofitable scenario. Economies of scale will be important, likely only the biggest will survive, and the interest in Bitfarms as an acquisition target may be the first soundings of an industry consolidation....

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