- Bitfarms share price is up by over 584% in 2024.
- It is benefiting from the ongoing Bitcoin surge.
- The company is essentially debt-free and growing.
Bitfarms (BITF) stock price has been in a spectacular rally this year as Bitcoin surged. The stock has risen by more than 584% this year and is hovering near its highest point in May 2022. This surge has brought its total market cap to over $945 million, making it one of the biggest miners in the industry.
Bitcoin and Ordinals growth
Bitfarms and other Bitcoin mining stocks are having a great year as their profitability bounced back. The most recent data by Coin Metric shows that Bitcoin mining companies saw their profits jump to over $2.5 billion in the fourth quarter.
This is a major reversal for an industry was going through a prolonged winter a year ago. Bitfarms has used this opportunity to do what all companies should do. It has reduced its debt dramatically since interest rates are rising. It ended last quarter with just $8 million in debt and it expects to be debt-free by February.
In addition to paying down its debt, Bitfarms has continued growing its operations. It has increased the number of miners, which has helped it to offset the rising mining difficulty. The company’s average cost for mining a Bitcoin has risen to $16,900.
With BTC price hovering at $43,000, it means that the company is making a profit of $26,000 per coin. This trend will continue improving if Bitcoin price continues rising, which is the base case for many analysts.
Additionally, like other Bitcoin mining companies, Bitfarms holds BTCs in its balance sheet. At the end of the last quarter, it had 760 coins, which have an unrealized value of over $32 million. Also, the company launched a service known as synthetic HODL that gives it room to accumulate BTC in a risk-managed and capital-efficient manner.
Additionally, as I wrote on Riot Platforms, the company is benefiting from the ongoing Bitcoin Ordinals craze. Traders have bought and sold Ordinals tokens worth over $1.5 billion this year alone.
Bitfarms stock price forecast
Turning to the daily chart, we see that the BITF stock price made a bullish breakout as the BTC price surged. It has now rallied above the 50-day and 100-day Exponential Moving Averages. Most importantly, the stock has formed a bullish flag pattern. In price action analysis, this is one of the most bullish signs in the market.
Therefore, the outlook for the shares is bullish, with the next level to watch being the YTD high of $3.18, which is about 14.7% above the current level. A move above this price will open the possibility of the shares jumping to the key resistance at $3.50.
