KBW is taking a extra cautious stance on the crypto mining sector. The Wall Road funding financial institution downgraded Bitfarms (BITF), Bitdeer (BTDR), and HIVE Digital (HIVE) from outperform to market carry out.
In a collection of notes to traders revealed Monday, the financial institution signaled that whereas the business’s pivot towards high-performance computing (HPC) and AI internet hosting is compelling, the trail to monetization is fraught with execution dangers and lengthy lead instances.
Confronted with a record-low margin surroundings following the 2024 halving, bitcoin miners are rebranding as digital infrastructure suppliers to seize a slice of the AI gold rush. By changing heat shells, services already geared up with high-density energy and cooling, into AI-ready knowledge facilities, these corporations hope to commerce risky mining rewards for secure, long-term enterprise contracts.
Nonetheless, the transition isn’t any easy pivot; the huge capital necessities and rigorous uptime requirements of HPC are forcing a high-stakes divide between those that can efficiently retrofit and people left holding stranded property.
Bitfarms: The lengthy look forward to Sharon
Analyst Stephen Glagola downgraded Bitfarms to market carry out, noting that whereas CEO Ben Gagnon has a strong imaginative and prescient, the market has already priced within the potential of its 120-megawatt (MW) Sharon, Pennsylvania, website.
Regardless of elevating Bitfarms’ worth goal to $3.00 from $2.50, the analyst doesn’t count on a proper leasing settlement to materialize till the second half of 2026. Moreover, he expressed skepticism concerning Bitfarms’ potential AI cloud entry in Washington and highlighted issues over rising leverage.
The shares have been unchanged in early buying and selling.
Bitdeer: scale vs. uncertainty
Bitdeer’s downgrade was accompanied by a big worth goal minimize, falling to $14 from $26.50. Whereas KBW acknowledged Bitdeer is on observe to turn into a number one public miner by 2026 via its vertically built-in Sealminer expertise, it warned that the corporate’s rising concentrate on AI cloud provides layers of uncertainty.
The analyst cited the enterprise’s present small scale, concentrated shareholder management, and “related-party publicity” as key causes to maneuver to the sidelines.
The inventory was modestly larger at $13.91.
HIVE: Missing a “sturdy edge”
HIVE Digital noticed its worth goal slashed to $3.50 from $11.00 as Glagola questioned the sturdiness of its AI cloud technique. The analyst famous that HIVE’s reliance on associate channels and tools financing leaves it “sub-optimally positioned” in comparison with pure-play knowledge middle rivals.
Moreover, KBW flagged HIVE’s detrimental pre-tax ROIC, suggesting the corporate is scaling its mining hashrate with out producing ample working returns in a suppressed hashprice surroundings.
HIVE was 0.3% larger at $3.04 at publication time.
Throughout all three names, the funding financial institution’s message was uniform: the transition from miner to knowledge middle operator is a capital-intensive journey that will require extra dilution and endurance than traders at present anticipate.
Learn extra: Early 2026 tailwinds for bitcoin miners as hashrate falls, profitability improves: JPMorgan
