Bitcoin (BTCUSD) has staged a massive recovery since late 2023, surging past $73,500 on Mar. 14 to break its prior records. The robust enthusiasm goes beyond the newly launched spot Bitcoin ETFs as anticipation builds for the upcoming "halving" event in April – an occurrence projected to reduce supply and potentially propel asset prices upward.
Despite investor optimism, JPMorgan warned of a possible downturn post-halving, envisioning Bitcoin prices descending to $42,000 as the euphoria subsides. The investment bank further mentioned that the Bitcoin halving and Ethereum upgrade are “largely priced in.” On the contrary, crypto experts like JMP Securities remain bullish, forecasting a $280,000 price within three years due to ETF inflows, while Standard Chartered predicts $150,000.
Amid BTC’s recent retreat from its all-time high, analysts at brokerage firm Bernstein perceive this as a temporary “dip buying opportunity.” They anticipate consolidation post-halving before the bull market resumes.
Given this backdrop, let's take a closer look at three low-priced Bitcoin stocks with immense upside potential.
Bitcoin Stock #1: Bit Digital
Valued at $208.6 million by market cap, New York-based Bit Digital, Inc. (BTBT) is engaged in the Bitcoin mining business, treasury management activities, digital asset staking and mining businesses, as well as Ethereum (ETHUSD) staking activities. It also offers specialized cloud infrastructure services for artificial intelligence (AI) applications.
Bit Digital shares rose 77% over the past 52 weeks, easily outperforming the S&P 500 Index’s ($SPX) 33.1% return. However, BTBT still trades more than 50% below its 52-week high.
Bit Digital capped 2023 with Q4 revenue of $16.05 million and a loss per share of $0.02, surpassing Wall Street projections for revenue of $12.06 million and a loss of $0.06 per share, respectively. For fiscal 2023, it mined 1,507.3 Bitcoins and earned close to 369 Ethereum tokens via staking.
Bit Digital ended the year with $18.1 million in cash and $189.3 million in total assets. Its treasury holdings of BTC have grown to 642.6, or $27.2 million, while its ETH position stood at 15,108, or $34.5 million, on Dec. 31, 2023.
Bit Digital's 2024 priorities include growing its Bit Digital AI - which generated $4 million in February 2024 - to achieve $100 million in annual revenue, maintaining a robust balance sheet, and enhancing treasury holdings in staked ETH.
Bit Digital has a consensus “Strong Buy” rating, with all three analysts covering BTBT agreeing on the same rating. The mean price target of $5.17 indicates roughly 101.9% upside potential. The Street-high price target for BTBT is $6.00, assigned by Northland Capital Markets in February, suggesting that the stock could rally as much as 134.4% from current levels.
Bitcoin Stock #2: Stronghold Digital Mining
Stronghold Digital Mining, Inc. (SDIG), headquartered in New York and founded in 2021, is a vertically integrated crypto asset mining company focused on Bitcoin. Its market cap currently stands at $65.1 million.
Shares of Stronghold Digital have underperformed, down 43.4% in 2024. They trade roughly 67% below their 52-week high.
The stock currently trades at 0.78 times forward sales, roughly 72% lower than the industry average.
Earlier this year, Stronghold announced an exchange agreement with holders of its 10% notes, canceling $17.9 million debt for convertible preferred stock worth $23.1 million. This could improve Stronghold's balance sheet. As of Feb. 29, it had approximately $10.2 million in cash, cash equivalents, and Bitcoin on its balance sheet.
Stronghold’s Q4 revenue of $21.7 million showcases its diverse income streams, dominated by cryptocurrency self-mining. Its net loss came at $21.2 million or $1.46 per share. Stronghold mined 2,463 Bitcoins in fiscal 2023, and 170 Bitcoins in February 2024. By hosting over 44,000 Bitcoin miners, it aims to fortify its position in the competitive Bitcoin mining landscape.
Stronghold Digital has a consensus “Moderate Buy” rating. Of the three analysts covering SDIG, two rate it a “Strong Buy,” and one has a “Hold" rating. The mean price target of $10.67 indicates roughly 158.4% upside potential. The Street-high price target for SDIG is $17, suggesting the stock could rally as much as 311.6% from current levels.
Bitcoin Stock #3: TeraWulf
TeraWulf Inc. (WULF), based in Easton, Maryland, is a digital asset technology company that develops, owns, and operates BTC mining facility sites in New York and Pennsylvania. It generates domestically produced Bitcoin powered by over 95% zero-carbon energy resources such as nuclear, hydro, and solar. Its market cap currently stands at $561.3 million.
TeraWulf shares are up 221.6% over the past year, surpassing the broader market. However, they trade roughly 41% below their 52-week high.
TeraWulf's fiscal 2023 revenue surged by 360.5% annually to $69.2 million, with a 57% reduction in loss per share to $0.35. In December 2023, it self-mined 334 Bitcoin worth $14.17 million, slightly up from November’s production due to continued improvement leveraging lower winter temperatures across the Lake Mariner and Nautilus facilities, along with streamlined miner maintenance and healthy transaction fees. Mining costs decreased to $3.74 million. For fiscal 2024, it anticipates mining 3,640 Bitcoin.
Benefitting from an industry-leading 3.2 cents per kilowatt hour power cost, TeraWulf significantly reduced its debt by $40 million, holding $49 million in cash and bitcoin as of Feb. 29. This strategic debt reduction and strengthened liquidity highlight TeraWulf's commitment to prudent financial management.
TeraWulf has a consensus “Strong Buy” rating. Four of the five analysts covering WULF rate it a “Strong Buy,” and one has a “Moderate Buy." The mean price target of $3.60 indicates roughly 51.3% upside potential. The Street-high price target for WULF is $4, suggesting the stock could rally as much as 68% from current levels.
