247 days ago
Summary Your Bitcoin outlook will ultimately determine whether BITF should accept RIOT`s offer to acquire at $2.30 per share. RIOT`s interest in acquiring BITF makes tactical sense because BITF rivals CLSK (the sector`s best) in several key areas while being priced 60% lower than CLSK. Despite BITF`s competitive performance, BITF could only justify a 5% upside ($2.15 target) assuming a peak of $100,000 Bitcoin for the next 4 years, making RIOT`s offer compelling and fair. BITF is unlikely to make it into our portfolio during a potential Bitcoin bull run by 17th October 2024. Introduction The Bitcoin mining market is a winner-takes-all market because the Bitcoin rewards are fixed. The side with the most network share (which is the capacity over the sum of the capacity of all other miners combined) wins (earns the most reward). Expanding organically (sourcing for power, leasing lands, building the infrastructure, purchasing the fleeting fleets, hiring, etc) is time-consuming at the very least. That is why the ability to acquire other Bitcoin miners is highly valuable. About half a year ago , we suggested how Bitfarms ( BITF ) could benefit from a potential sector-wide consolidation after the halving event occurred in April by acquiring other underperforming Bitcoin mining companies cent on the dollar. We cited BITF`s ability to operate efficiently and maintain network share to maintain profitability, a feat few could achieve at the time. Specifically: BITF`s cost basis is still relatively lower than its comps which positively contributes to its resilience. This resilience can help BITF outlast competitors and capture more network share. BITF can reverse its declining network share and further decrease mining costs if it can meet its 12 EH/s guidance . Fast-forward to today. BITF`s capacity is nearing 12 EH/s guidance, and true enough, BITF has been able to stop any further decline since 2023Q2. This is a good performance, considering Marathon Holdings ( MARA ) is losing its network share advantage. Fig 1. Normalized Network Share Changes of Major Bitcoin Mining Companies (Author) Our analysis of Riot Platforms ( RIOT ) mentioned that its attempted acquisition of BITF makes strategic and tactical sense. In many ways, BITF is similar to CLSK in performance, while its market cap is less than half of CLSK`s. But what about from BITF`s perspective? Does it make sense for BITF shareholders to reject the takeover? How should it impact our investment thesis? This article aims to discuss the questions above and establish our investment thesis for BITF in preparation for a potential Bitcoin bull run by exactly one month. Similar Performance as Sector`s Best, But At Lower Prices Firstly, BITFs are comparable to CLSKs in terms of cost efficiency. BITF`s all-in cost basis per Bitcoin in 2024Q2 initially appears to be the highest at $142k. During the quarter, BITF incurred an operating cost of $87mil, which consists of $20.4mil electricity cost, $57.3mil depreciation cost, and $12.4mil SG&A cost, minus the sales tax recovery of $25.7mil pro-rated over 9 quarters. With 614 Bitcoins produced, this equates to $142k per Bitcoin. In April 2024, the Company received confirmation from the Provincial tax authorities that Canadian sales taxes paid by the Company from February 5, 2022 onwards are refundable Company BITF CLSK IREN MARA RIOT Cost Basis on Quarter 142,092.00 73,045.00 94,757.00 112,109.00 132,583.00 From the breakdown above, BITF`s depreciation costs account for 65% of the total cost. However, we found that depreciation costs should be consistent across the sector; only the depreciation rate should vary due to varying accounting methods. For instance, CLSK and RIOT have the same purchase price of $16mil per 1 EH/s. RIOT recently reduced depreciation costs on paper by extending the expected useful life of its mining fleets from 2 years to 3 years . Effective January 1, 2024, the Company changed the estimated useful life of its miners and mining equipment from2 years to 3 years. Depreciation and amortization for the three months ended March 31, 2024 and 2023, was $32.3 million and $59.3 million, respectively, a decrease of approximately $27.0million. The decrease was primarily due to the change in the estimated lives of our Bitcoin miners from 2 years to 3 years. Therefore, we`ve excluded depreciation cost in comps because BITF`s high depreciation cost could be a side-effect of a more aggressive depreciation policy. After excluding depreciation cost, BITF`s total cost basis dropped to $49k, rivaling even CLSK`s best-in-class cost efficiency. Going back to 2022Q1, we can see that BITF`s cost efficiency (excluding depreciation cost) was consistently among the lowest. Company BITF CLSK IREN MARA RIOT Cost Basis (w/o depreciation) 48,769.00 47,315.00 61,298.00 69,446.00 88,389.00 Fig 2. All-in cost basis per Bitcoin (excluding depreciation costs) of major Bitcoin mining companies (Author) Secondly, BITF is now comparable to CLSK in terms of capacity growth. Referring back to Fig 1, we can see that CLSK enjoyed a significant increase in network share thanks to its aggressive expansion efforts. As a result, we saw CLSK outperforming the market by a considerable margin but also extended into overvaluation territory. It may appear that we called the top on this one, but we felt that the odds were pointing to the downside at the time, nothing more. This series of price actions suggest that the network share gained by CLSK has been priced in and is now in the past. What counts are future performances because the stock market is forward-looking. With this in mind, even though BITF`s network share remained flat from 2023Q1 to 2024Q2, BITF guided an 86% increase from August`s 11.3 EH/s capacity to 21 EH/s by the end of 2024. This is actually one of the highest in the sector right now. A clear guidance with a defined timeline, this is what we like. The guidance timeline matters because valuations are based on assumed future capacity, and the guidance timeline dictates the time period required to achieve the assumed capacity. Guidance Timeline is crucial for our strategy, particularly because our strategy is considered timing the market. We`re looking for Bitcoin miners to tilt (sell Bitcoins for Bitcoin miners) into when we receive the 2 confirmations for a Bitcoin bull run by 17th October. This strategy of tilting our crypto portfolio worked wonders for us in the past, such as with CLSK and BITF , all documented here on Seeking Alpha. We annotated (*) CLSK`s and RIOT`s capacity growth guidance to indicate the longer time horizon required to achieve their guidance. CLSK has higher growth guidance, but the timeline is unknown; RIOT has similar growth guidance, but it takes 5x longer to achieve (BITF`s 1 quarter vs RIOT`s 5 quarters). Table 1. Guidance and IBP of Major Bitcoin miners Company BITF CLSK IREN MARA RIOT Latest Capacity (Aug) 11.30 22.60 16.00 35.20 23.30 Guided Capacity 21.00 50.00 30.00 50.00 41.00 Capacity Growth Guidance 86% 121%* 88% 42% 76%* Guidance Timeline 2024Q4 ? 2024Q4 2024Q4 2025Q4 Current Market Cap 900 2,301 1,373 4,614 2,122 Adjusted Book Value 439 1,333 848 2,431 2,174 Cost Basis on Quarter 142,092.00 73,045.00 94,757.00 112,109.00 132,583.00 Cost Basis (w/o depreciation) 48,769.00 47,315.00 61,298.00 69,446.00 88,389.00 IBP 163,429 90,939 118,281 117,796 112,871 IBP w/o Depreciation 76,253 69,549 84,822 92,651 79,334 Two relevant expectations to this thesis are Bitcoin reclaiming ATH by 17th October and peaking at $100k by the end of March 2025. In CLSK`s case, its current market cap of $2.3 bn may be justified with the lowest Implied Bitcoin Price (`IBP`; excluding depreciation cost) of $69k, assuming a 50 EH/s capacity. However, even if Bitcoin reaches $69k by 17th October, its current market cap of $2.3bn can`t be truly justified yet because it has not realized its assumed 50 EH/s capacity. The same goes for RIOT. RIOT may have an IBP of $79k (similar to BITF), but its market cap still can`t be justified when Bitcoin reaches $79k during the 2nd half of the Bitcoin bull market (October 2024-March 2025) because it has yet to achieve its assumed 40 EH/s capacity. In contrast, BITF is expected to achieve its guided 20 EH/s before Bitcoin reaches $79k before March 2025, justifying its market cap in a timely manner. Therefore, BITF presents the best upside potential considering both the timeline and IBP. In short, BITF can rival CLSK in terms of performance. The Implied Bitcoin Price (`IBP`) is a valuation model we developed to account for both book value and profitability prospects. The IBP is the Bitcoin price that can justify a Bitcoin miner`s current market cap assuming a 1x adjusted book value (excluding intangibles) + 5x earnings multiples. The lower, the better. This metric works because profitability must justify the premium on book value. For instance, we`re observing an ongoing mean reversion of the price-to-book value ratio (`PBR`) taking place (fig 3). The market is pricing the Bitcoin mining sector at around 2x PBR or a 1x premium. Hence, these miners must be able to provide the value of the 1x PBR premium through profitability. That`s why the IBP is usually higher than the all-in cost basis per Bitcoin, except for when market cap is below book value (like in RIOT`s current case) Valuations: RIOT`s Offer Was Fair Our findings suggest RIOT`s offer to wholly acquire BITF at $2.30 per share was fair. At our expected peak of $100,000 Bitcoin price, BITF`s adjusted book value would be worth $477mil (Tangible assets + Bitcoin reverse valued at $100,000 per Bitcoin), up from $439mil from the current adjusted book value, relatively insignificant due to BITF having the lowest Bitcoin % over total assets (Fig 3; ignoring IREN, which never HODL). Fig 3. Value of Bitcoin reserves over Total Assets (%) (Author) Referring to Table 1, BITF`s profit per Bitcoin mined is implied to be between $51k profit (ignoring depreciation cost) and $42k loss (assuming full official depreciation cost). Since depreciation cost is an actual cost and shouldn`t be ignored, we only use the $51k profit per Bitcoin as a reference to compute BITF`s highest justifiable intrinsic value. On the top end (at $51k profit per Bitcoin), assuming a 21 EH/s capacity at a 60% network hash rate growth rate, BITF`s operational value at 5x earnings would be valued at $800mil. Combined with its $477mil book value, BITF can justify a $1.27bn market cap, or $2.80 per share (40% upside). For a more realistic estimation, we can use the sector`s average of 33%. Data shows that the average % depreciation cost to total cost is about 33% (Fig 4). The implied BITF`s all-in cost basis would be $69.6k, or $30.4k profit per Bitcoin. This then implies an operational intrinsic value of $475mil. Combined with its $477mil book value, BITF can justify a $950mil market cap, or $2.15 per share, which is today`s price. Therefore, it is reasonable to suggest that RIOT`s offer to wholly acquire BITF at $2.30 was actually fair. Fig 4. % Depreciation cost over Total Operating Cost (excluding impairment costs) (Author) Verdict Your Bitcoin outlook will ultimately determine whether BITF should accept RIOT`s offer to acquire at $2.30 per share. This offer presents a 40% return payday based on May`s share price. In comparison, our model suggests that BITF`s valuation should peak at around $2.15 only, assuming a new ATH at $100,000 per Bitcoin for the next 4 years. By this standard, as shareholders, we would`ve accepted RIOT`s offer. RIOT`s offer looks even more compelling when factor in the probability that BITF`s actual depreciation cost could be much higher than the sector`s. This could explain the controversy surrounding BITF`s poison pill event and proposed board shuffling. Based on the thesis presented in this article, BITF is unlikely to make it into our portfolio. Currently, we plan to tilt into CLSK and MARA if signs for a potential Bitcoin bull run emerge. In the following articles, we`ll examine whether Iris Energy ( IREN ) deserves a place in our portfolio.
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Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of BitMaden. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.
Cetus Exploit Drains $223M: DeFi Faces Massive Breach While Sui Network Holds Firm
In one of the most momentous events of 2025, the decentralized exchange Cetus suffered a sophisticated attack that brought about the loss of $223 million in crypto assets. The incident, now generally called ‘The Cetus Hack,’ was not a simple exploitation of a vulnerability but rather an orchestrated digital heist that used token spoofing, smart contract manipulation, and a neat escape route that concluded with tens of thousands of Ether apparently disappearing into thin air. Even though the incident was serious, the Sui blockchain—hosting the Cetus DEX—was still running and stable. While parts of the DeFi ecosystem panicked, the Sui infrastructure stood tall, keeping coordinated in real-time and maintaining zero downtime. Inside the Exploit: Token Spoofing and Overflow Glitch Per security analysts and on-chain forensics, the attacker started the breach by creating a fake token and shoving an almost nonexistent amount of liquidity into a Cetus pool. This action, while seemingly trivial, caused an overflow in the automated market maker’s math logic, breaking its balance calculations and allowing the attacker to pull out large quantities of legitimate tokens—$SUI and $USDC—without providing any corresponding value. In just a few minutes, the assailant siphoned off an estimated $223 million worth of tokens. Of that, about $60 million got out of the protocol before countermeasures were enacted. The money was swiftly bridged to Ethereum, where it was turned into around 22,000 ETH. THE CETUS HACK: $223M GONE. $6M ON THE TABLE. This wasn’t a glitch. It was a heist. Fake tokens. Overflow exploit. 22K ETH exit. Now a $6M bounty is being offered to get the money back. But the real story? Sui just proved it’s built for chaos. pic.twitter.com/TFpnOCCa1d — Kyle Chassé / DD (@kyle_chasse) May 23, 2025 The attack’s audacity and precision took many in the DeFi world by surprise. Memecoins across the Sui ecosystem fell by as much as 90%; the satellite tokens that go along with the Sui ecosystem saw huge price drops. Even the stablecoin $USDC temporarily fell off its peg. And yet, the blockchain’s native token, $SUI, pump stays relatively safe. That’s the takeaway from the episode. Damage Control in Real-Time: No Chain Halt, No Panic What made this exploit different from other high-profile breaches? It wasn’t just the mass of stuff they made off with; it was what happened next. Most blockchains, when they’re really under threat, either pause operations and go into emergency mode or just flat-out roll back some transactions. Didn’t happen here. Sui kept right on operating. In fact, the validators coordinated so well that you’d almost think they were prepped & ready for a network-defining moment. This is particularly remarkable in a setting where numerous layer-1 blockchains count on centralized interventions or “pauses” to reduce harm. Sui, instead, illustrated the advantages of strong architecture and decentralized decision-making, even in extreme levels of stress. Cetus proclaimed a $6 million bounty in the hours after the attack—payable in $SUI tokens—for the return of the stolen funds. This is not your standard bug bounty; it’s a last-ditch negotiation. Cetus is offering what amounts to ransom, and hoping to recover stolen assets before they are laundered using the usual privacy tools and mixers. Sui Deploys Emergency Tools as Recovery Effort Begins In a high-stakes effort to reclaim authority over the situation, Sui has put into effect a fresh whitelist function that enables certain transactions to circumvent standard security protocols. Rounding out the suite of new tools is a restore module, accessible only to a select few, that could let Sui either pull back assets snatched by the attackers or pay back the many liquidity providers whose funds were misappropriated. These devices signify a bold but thoughtful move in the direction of responding to DeFi incidents. While detractors may ask whether security is being bypassed in too many places, the transparency of Sui’s actions and the speed with which they have been carried out suggest that a very well-coordinated recovery plan is in progress. Even though Cetus has suffered a large amount of damage and the wider DeFi space on Sui has been impacted, the Sui chain itself seems to have passed a significant stress test. This situation serves not only to starkly illustrate how vulnerable complex smart contracts are but also to underline the resilience and responsiveness of Sui’s core architecture. The next move is for the attacker to make—but the bounty is active, and the pursuit has begun. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news ! Seeking Alpha
Solana Approaches $190 — But MAGACOIN FINANCE’s Momentum Suggests a Potential 12,000% Upside
Solana’s impressive climb toward the $190 mark is once again capturing the market’s attention, driven by robust DeFi activity and institutional flows. Yet, as established giants like Bitcoin, XRP, and Polkadot trade in tighter ranges, the spotlight is shifting to MAGACOIN FINANCE—a presale altcoin whose momentum and upside projections are eclipsing even the most established names. As Q3 2025 approaches, smart money is increasingly positioning for the next breakout, and MAGA is emerging as the top candidate for exponential gains. Bitcoin: Market Anchor, But Capital Is Rotating Bitcoin (BTC) continues to hold its ground above $110,000, with institutional inflows and ETF adoption providing a strong foundation for further growth. Analysts forecast a potential surge to $116,000–$137,000 in the coming weeks, but as BTC’s momentum steadies, capital is rotating into altcoins with higher-multiple potential. Early-stage projects like MAGACOIN FINANCE are now drawing aggressive capital rotation, as investors look to maximize returns in the next phase of the bull cycle. JOIN NOW — $0.007 LISTING IS COMING FAST! MAGACOIN FINANCE: Presale Powerhouse With 12,000%+ Potential MAGACOIN FINANCE is rapidly outpacing the competition, with Stage 8 now live and over $8 million raised. The project’s scarcity-driven model—a capped 100 billion token supply, Hashex-audited contracts, and viral political narrative—has made it the #1 altcoin entry for ROI-focused buyers in 2025. Analysts are projecting up to 40x returns from current entry levels, with some models suggesting a path to 12,000%–18,500% upside if momentum continues. A recent $132,000+ whale buy marks the largest single early-stage investment of the year, underscoring the conviction behind MAGA’s explosive setup. With a $0.007 listing target on the horizon and a limited-time 50% bonus for early buyers using promo code PATRIOT50X , MAGACOIN FINANCE is quickly becoming the go-to allocation for those seeking the next supercycle winner. Each stage is filling rapidly, and as visibility grows, MAGA is setting the pace for early-stage gains before listings ignite the next wave of price discovery. XRP: Bullish Momentum, But Limited Multiples XRP is trading between $2.36 and $2.65, having surged over 300% since late 2024 on the back of regulatory clarity and institutional partnerships. While technicals and ecosystem developments remain bullish, short-term momentum has slowed as XRP consolidates below recent highs. Analysts now project a breakout above $3.40 could push XRP toward $4.50–$7.50 by summer, but for now, the asset is in a holding pattern as the market awaits the next catalyst. Many traders seeking sharper upside are now looking to early-stage projects like MAGACOIN FINANCE for more dramatic returns. Polkadot: Quiet Growth, But MAGA Steals the Spotlight Polkadot (DOT) is holding steady around $7.50, with ongoing development and ecosystem expansion. While DOT remains a dependable hold for long-term investors, its near-term upside is less dramatic compared to the explosive potential of MAGACOIN FINANCE. As traders seek sharper returns, MAGA’s early-stage appeal and viral narrative are making it the go-to allocation for those chasing the next 40x winner. CLICK HERE – TIME IS RUNNING OUT Conclusion Solana’s approach to $190 is a testament to its resilience and institutional appeal, but MAGACOIN FINANCE’s presale momentum and analyst forecasts up to 12,000%–18,500% upside are keeping it firmly in the spotlight. With Stage 8 nearly full, a $0.007 listing target, and a 50% bonus for early buyers using PATRIOT50X , MAGA offers a rare chance to secure ground-floor exposure before listings ignite the next wave of price discovery. For those seeking the next breakout altcoin, MAGACOIN FINANCE is the name on every smart investor’s radar. Website: https://magacoinfinance.com Twitter: https://x.com/magacoinfinance Continue Reading: Solana Approaches $190 — But MAGACOIN FINANCE’s Momentum Suggests a Potential 12,000% Upside Seeking Alpha
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