In the ever-evolving landscape of investments, few assets have garnered as much attention and debate as Bitcoin. Recently, we published a detailed list of the 12 Best Bitcoin Stocks To Buy According To Billionaires. This piece aims to dive deeper into one of those stocks: Cipher Mining Inc. (NASDAQ:CIFR) and its positioning relative to other prominent Bitcoin stocks in the market.
Bitcoin emerged as the star performer in 2024, powering through volatility and achieving unprecedented growth, particularly following the establishment of new ETFs and a wave of optimism around regulatory changes anticipated under a new U.S. administration. Starting the year at approximately $40,000, Bitcoin surged to nearly $94,000 by year’s end, with a remarkable ascent that saw it crossing the $108,000 mark in mid-December. This dramatic spike can largely be attributed to an invigorated market sentiment that followed the U.S. presidential election, as many investors hoped that Donald Trump’s victory would herald more favorable regulations for cryptocurrencies.
A significant factor in Bitcoin’s price fluctuations is its halving mechanism, an integral element of its blockchain technology. Bitcoin halving, which occurs approximately every four years, reduces the mining rewards, thus limiting the new coins entering circulation and supporting its long-term value. The most recent halving event on April 20, 2024, saw block rewards decrease from 6.25 BTC to 3.125 BTC, a change that historically precedes price surges due to the resulting scarcity. This regulated supply reinforces the narrative of Bitcoin as a digital store of value—a characteristic that parallels gold’s role in traditional finance.
As Bitcoin’s prominence grew, it began to take center stage not just within the cryptocurrency realm but across larger financial markets. By the close of 2024, the total investable assets globally amounted to over $200 trillion, with cryptocurrencies claiming a piece of the pie at around $3 trillion. Institutional investors, in particular, have increasingly flocked to Bitcoin exchange-traded products (ETPs), registering an impressive inflow exceeding $34 billion. Bitcoin’s role has evolved from a fringe asset to a critical benchmark within multi-asset portfolios, further supported by emerging discussions about classifying it as a strategic reserve asset amid rising economic pressures in the U.S.
In this volatile environment, certain billionaire investors remain steadfast in their belief in Bitcoin’s future. Figures like Michael Saylor, the executive chairman of a prominent business intelligence firm, have amassed significant holdings, making his company the largest corporate Bitcoin holder globally. Mark Cuban, another tech billionaire, has echoed the sentiment, predicting that Bitcoin might one day rival the U.S. dollar as the world’s reserve currency—an assertion that underscores the growing confidence in Bitcoin’s potential.
To gather insights for this article, we examined the Insider Monkey database of billionaire stock holdings, spotlighting the top 12 firms engaged in the cryptocurrency industry with the most billionaire investors as of Q4 2024. These stocks are ranked in ascending order based on the level of billionaire investment, highlighting trends and preferences within the elite investor community.
Why focus on stocks favored by hedge funds? Evidence suggests that many retail investors, including ourselves, can achieve superior returns by mimicking the stock selections of successful hedge funds. This investment philosophy has proven effective in our quarterly newsletter, which has yielded an impressive 373.4% return since May 2014—outpacing its benchmark by a staggering 218 percentage points.
Cipher Mining Inc. (NASDAQ:CIFR), headquartered in New York, specializes in developing and managing extensive data centers throughout the U.S., balancing its resources between Bitcoin mining and high-performance computing. Currently, it ranks 4th in our list of elite Bitcoin stocks. The company recently garnered a $50 million private investment in public equity (PIPE) from SoftBank Group Corp., a significant global investment entity, signaling a promising collaborative future for expansion in high-performance computing data center development.
In its last quarter, Cipher Mining reported an impressive $42 million in revenue, paired with GAAP net earnings of $18 million. The adjusted earnings soared to $51 million, showcasing a remarkable increase and underscoring the company’s focus on maintaining cost-effective Bitcoin production practices. Despite a decline in cash reserves to $6 million, attributed to heavy investments throughout the year, Cipher held robust liquidity at $98 million as of the year’s end, largely thanks to its Bitcoin holdings.
Analysts have begun to take notice, with Rosenblatt initiating coverage of Cipher Mining Inc. (NASDAQ:CIFR) with a Buy rating and a price target of $6.5, aligning with broader bullish sentiments across the market, which suggest a price range of $7 to $9. Their optimism largely centers on Cipher’s potential for growth within the high-performance computing sector, marking it as a noteworthy player in the Bitcoin stock arena.
Overall, CIFR ranks as the 4th best Bitcoin stock recommended by billionaires, demonstrating both its potential for growth and the ongoing interest from influential investors. However, while CIFR shows promise, it’s essential to consider other emerging sectors as well; some AI stocks may present even greater opportunities for returns in the shorter term. Interested investors might explore our report on the cheapest AI stock as a comparison.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article was initially published on Insider Monkey.
