Bit Deer: Comprehensive Analysis of Its Business Model and Rise Prospects

Recently, Bit Deer announced its operating data for November, among which the most notable is the start of mass production of the A2 mining machine, with the first batch of 30,000 units sold. This marks an important step for the company in self-developed chips and mining machine sales.

Self-developed Chips and Mining Machine Sales: First Rise Curve

In the past six months, Little Deer successfully completed the initial production run of A2 and A3 mining machine chips. According to public information, the operational parameters of the A2 mining machine are already ahead of existing mining machines on the market. Although the A3 mining machine has not been officially released, its expected performance could make it the largest single-unit hash power mining machine in the world, with energy consumption also expected to be at a leading level.

As of the end of November, the company has deployed 895MW of power plants in the United States, Norway, and Bhutan. An additional 1645MW of projects are under construction, with 1415MW expected to be completed in the latter half of 2025. The company also plans to add over 1GW of power plant capacity in 2026. Notably, the average electricity price of the company's self-operated power plants is below $0.04 per kilowatt-hour, which has a significant advantage in the industry.

According to model predictions, the shutdown price of the Bit Deer self-operated mining farm is approximately 35,000 USD for Bitcoin. When the Bitcoin price exceeds 150,000 USD, the pre-tax profit growth rate of the self-operated mining farm will surpass the rise in Bitcoin prices. If the Bitcoin price reaches 200,000 USD, the pre-tax profit margin of the self-operated mining farm may approach 80%.

However, the market still has two major concerns about the first rise curve of the little deer:

1. The issue of the ratio between mining machine sales and self-use. By mid-2025, the company's power plant reserves are expected to reach 2.3GW. If all A3 mining machines are used, the self-operated computing power may approach 220EH/s, accounting for about 20% of the total network computing power. Considering the company's cash flow situation, it is expected that a balance will be sought between mining machine sales and self-operated computing power in the future.

2. The competitive relationship with other mining machine manufacturers. The core of the competition lies in the performance of the mining machines and the cost of self-operated computing power. Currently, Bit Deer has a competitive advantage in both areas.

AI Computing Power: Second Rise Curve

The company has begun deploying Nvidia H200 chips at the TIER3 data center, entering the AI computing market. The company plans to invest at least 200MW of electricity in the short term for the deployment of high-end AI chips and to start providing cloud computing services to customers.

Investment Recommendations and Valuation

Considering the company's development in both mining machine sales and self-operated mining farms, as well as its potential to enter the AI computing power market, Bit Deer's current offering may be one of the most cost-effective choices among U.S. mining stocks.

Based on the current valuation standard of mainstream North American mining companies at an average of $170 million/EH, it is expected that in the next two years, Xiao Lu's actual self-operated mining farms may reach between 120-220 EH/s. Based on this estimate, the company's market value could be between $20.4 billion and $37.4 billion, indicating a rise potential of 4.8 to 9.7 times compared to the current stock price.

Investment Risk

1. Bitcoin price volatility risk
2. Potential risks of TSMC's current chips due to possible sanctions

Investors should fully consider these factors when making investment decisions.