Bitdeer, one of the largest Bitcoin miners globally, has suffered around 30% decline in value as soon as it went live on the listing of Nasdaq last Friday, April 14. Let’s look at the factors that may have caused it.
The Singapore-based company’s shares are trading under the ticker BTDR. The shares opened at $9.70 each but they quickly fell down to $6.30 per share at some point during its initial public offering (IPO), prompting the stock to halt its trade several times due to volatility. Eventually, the price settled at $7.03 at the 4 PM (Easter Daylight Time) market closing.
While other crypto mining stocks saw slight single-digit increases in their share value, the company’s performance left investors underwhelmed.
Possible Reasons for the Decline in Value
It’s been a rocky ride for Bitdeer as it made its IPO debut on Nasdaq despite the optimistic movements of Bitcoin and other cryptocurrencies. So, why did this happen?
Let’s take a closer look at the potential reasons behind Bitdeer’s poor performance.
1. Reduced Demand
The cryptocurrency market has been generally highly volatile lately, which has caused a more cautious approach from investors. This, combined with increased competition in the crypto mining sector, may have led to reduced demand for Bitdeer’s stocks.
2. Shift in Focus from Stocks to Crypto
With the bullish sentiment in the crypto market, many investors may have shifted their focus away from stocks and towards cryptocurrencies themselves. The Crypto Fear & Greed Index scores indicate that investors have a high appetite for risk and high hopes for future returns, which may have contributed to a reduced interest in Bitdeer’s stocks.
3. Energy and Emission Concerns
There have been concerns over Bitdeer’s energy consumption and carbon emissions. Environmentalists and the mainstream media have been highly critical of crypto mining companies, painting them as massive consumers of fossil fuels with high rates of electricity consumption and carbon emissions.
4. Declining Earnings
The company’s financials may have contributed to its poor performance. Bitdeer reported a revenue of $330.3 million and a loss of $62.4 million for the 2022 financial year, which was less than the previous year’s revenue of $394.7 million and profit of $82.6 million.
According to the U.S. Securities and Exchange Commission (SEC), Bitdeer’s hashrate or computing power stood at a total of 16.2 exahash per second (EH/s), making it the second-largest after the now-bankrupt Core Scientific (CORZ) and ahead of Riot Platforms (RIOT) and Marathon Digital Holdings (MARA).
The company allocates approximately one-quarter of its hashrate for self-mining, keeping the Bitcoin rewards for itself. Meanwhile, the remaining three-quarters are used for cloud mining, where customers rent their machines and receive the rewards afterwards.
Bitdeer’s merger with Blue Safari Group Acquisition Corp., a special-purpose acquisition vehicle (SPAC) trading under the ticker BSGA, was given the green light three days before the IPO. The crypto mining firm presently possesses six sites across Washington State, Texas, Tennessee, and Norway.
The Bitcoin miner disclosed a total energy capacity of 775 megawatts as of the end of 2022, about 200 MW less than its February 2022 estimates.
The decline in the value of Bitdeer’s shares following its IPO on Nasdaq is certainly disappointing for the company and its investors. It’s hard to pinpoint the exact reason for this but the factors enumerated here may most likely be in play.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.