Leveraging their more three decades of energy technology experience and using an inexpensive energy supply containing mostly nuclear, hydroelectric, solar, and wind, it only costs CleanSpark $4,500 in energy to mine one Bitcoin. Luckily for CleanSpark, they have access to both clean and cheap energy. But, with the climate concerns raised by Tesla's ( TSLA) Elon Musk and other ESG investors such as Larry Fink of BlackRock ( BLK), a Bitcoin mining company must also obtain a majority of its energy through renewable sources to attract institutional capital. The key to success in the world of Bitcoin mining is to source cheap energy. However, when considering that CleanSpark ( NASDAQ: CLSK) is profitable, its business is rapidly growing, and its stock price is already down 83% from its January 2021 highs, I believe the risk/reward opportunity is starting to look promising for long-term investors wanting exposure to the Bitcoin mining industry.ĬLSK Stock Chart (TradingView) Renewable Energy and Profitability
In today's equities market, many companies are getting crushed and Bitcoin miners are no exception.
Active contributors also get free access to SA Premium. It's easy to become a Seeking Alpha contributor and earn money for your best investment ideas. Conversely, if the price stays the same or even increases, expect more miners to increase their hash rates and make the difficulty rate go up, also making it hard for CleanSpark to meet these numbers.Editor's note: Seeking Alpha is proud to welcome Austin Sonnier as a new contributor. If the price of Bitcoin drops, CleanSpark will struggle to meet these numbers. For perspective, when China banned its miners, the overall difficulty rate got significantly easier overnight and CleanSpark was able to mine more tokens than otherwise possible. Second, these projections are also based on the current difficulty rate of the Bitcoin blockchain network. First, management is basing these projections on Bitcoin being at $47,000, which isn't guaranteed. However, take all of the guidance regarding Bitcoin with skepticism because of two assumptions that are baked in. For perspective, CleanSpark's market capitalization is currently under $400 million, which makes shares look like a bargain. The company also plans to increase its hashing power considerably over the next year and a half, and management says its could be generating $446 million to $480 million annually when all of its planned mining rigs are operational. Between increased mining power (measured with a term called "hash rate") and a less competitive mining environment (because miners in China have been shut down), CleanSpark mined a record 191 tokens during the quarter and now holds 301.4 on its balance sheet.ĬleanSpark's management raised full-year revenue guidance by roughly $3 million to a range of $49 million to $62 million, with most of this coming from Bitcoin.
Most of this growth is coming from its Bitcoin mining business. And looking at the first three quarters of fiscal 2021, the company's revenue is up 176% to $22.3 million. So whatįor the third quarter, CleanSpark reported revenue of $11.9 million, which was up 250% from the same quarter last year. As a result, CleanSpark stock was down a whopping 22% as of noon EDT today. But it appears the market was surprised with its big loss this quarter. Management talked up the company's growth, particularly when it comes to mining Bitcoin ( BTC -6.05%).
Shares of cryptocurrency-mining and energy-technology company CleanSpark ( CLSK -4.11%) got hammered on Tuesday after it reported financial results for the third quarter of 2021.