This Bitcoin Mining Stock Is Still 70% Below Its Peak but Now Makes Up 34% of a Portfolio
Key Points
New York City-based Aurelius Capital Management added 6.7 million shares of Bitfarms in the third quarter.
The trade accounts for 34.4% of Aurelius Capital Management's 13F reportable assets under management.
The new position was valued at $19 million at quarter-end, making it the fund's largest holding.
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On November 13, New York City-based Aurelius Capital Management initiated a new position in Bitfarms (NASDAQ:BITF), adding 6.7 million shares valued at $19 million, according to a recent SEC filing.
What Happened
Aurelius Capital Management, LP disclosed a new equity position in Bitfarms (NASDAQ:BITF), acquiring over 6.7 million shares worth $19 million as of September 30. The transaction, detailed in a Securities and Exchange Commission (SEC) filing dated November 13, makes Bitfarms the fund’s largest reported U.S. equity holding for the quarter.
What Else to Know
The new represents 34.4% of the fund’s 13F assets under management.
Top holdings after the filing:
- NASDAQ:BITF: $19 million (34.4% of AUM)
- NASDAQ:CORZ: $8.4 million (15.3% of AUM)
- NASDAQ:CIFR: $6.3 million (11.4% of AUM)
- NASDAQ:WULF: $5.1 million (9.3% of AUM)
- NASDAQ:RIOT: $4.5 million (8.2% of AUM)
As of Friday, Bitfarms shares were priced at $2.53, up 39% over the past year and well outperforming the S&P 500, which is up 16.5% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Market Capitalization | $1.5 billion |
| Revenue (TTM) | $276.4 million |
| Net Income (TTM) | ($128.2 million) |
| Price (as of Friday) | $2.53 |
Company Snapshot
- Bitfarms operates cryptocurrency mining farms, primarily generating revenue from validating transactions on the Bitcoin Blockchain and earning block rewards and transaction fees.
- The company’s business model is based on large-scale, energy-efficient Bitcoin mining operations, supplemented by hosting third-party mining hardware and providing electrical services in Quebec.
- Primary customers include institutional and commercial clients seeking mining hosting solutions, as well as residential and commercial customers for electrical contracting services.
Bitfarms is a vertically integrated Bitcoin mining company headquartered in Toronto, Canada, with operations focused on North America. Its diversified revenue streams and operational expertise position Bitfarms as a notable player in the digital asset mining sector.
Foolish Take
What matters for long-term investors here is not exactly the near-term price performance but where conviction is being concentrated across the portfolio. This position dwarfs the fund’s other crypto-linked holdings, signaling that this is viewed less as a tactical trade and more as the core expression of a broader infrastructure thesis. With the vast majority of reported assets spread across bitcoin miners and digital infrastructure names, the strategy is clearly betting that scale, power access, and balance sheet flexibility will matter more than short-term volatility.
In the third quarter, Bitfarms generated $69 million in revenue from continuing operations, up 156% year over year, and delivered adjusted EBITDA of $20 million, or 28% of revenue. While net losses persist, the balance sheet has been materially strengthened. Bitfarms closed a $588 million convertible note offering and reported total liquidity of about $814 million as of mid-November, including both cash and bitcoin holdings. Management is redeploying that capital toward higher-value infrastructure, including converting its Washington site for high-performance computing and AI workloads and advancing multiple North American projects designed to support next-generation GPUs. If Bitfarms successfully pivots from pure mining toward digital infrastructure, the upside from today’s discounted levels could be meaningful.
Glossary
13F reportable assets: Investment assets that institutional managers must disclose quarterly to the Securities and Exchange Commission (SEC) on Form 13F.
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
Net position change: The difference in the number or value of shares held in a security after a trade or series of trades.
Block rewards: New cryptocurrency coins awarded to miners for validating transactions and adding blocks to a blockchain.
Transaction fees (crypto): Payments made to miners for processing and validating transactions on a blockchain network.
Vertically integrated: A company that controls multiple stages of its production or supply chain, from operations to distribution.
Hosting (mining): Providing infrastructure and services for third parties to operate cryptocurrency mining equipment at a facility.
Institutional clients: Organizations such as funds, banks, or companies that invest large sums, rather than individual investors.
Bitcoin Blockchain: The decentralized digital ledger that records all Bitcoin transactions and is maintained by a network of miners.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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