BIT Blog

Analysts' Insights

Analysts' Insights

Crypto-equities are undervalued

👇 1) Two weeks ago we suggested buying crypto-related equities as they appeared to trade at significant discounts to the price of Bitcoin. Indeed, our basket of ten crypto stocks is now up +17%, outperforming the +7% rally in Bitcoin.

👇 2) Two of our ten suggestions have returned over +30% in two weeks. A small mining company IREN is up +31% while the larger mining company Marathon is also up +31%.

👇 3) As some of those stocks have had a massive rally, we suggested in our report released yesterday to sell MicroStrategy which rallied by +19% during the last two weeks and now only trades at a 10% discount to fair based on our regression model.

👇 4) We suggested considering using the MicroStrategy allocation and deploying it into Blue Safari, which is a SPAC and will start to fully trade on April 24 (tonight) as the SPAC will merge with Bitdeer – a cloud mining company.

👇 5) The Blue Safari deal value was initially negotiated at a $4 billion valuation when Bitcoin prices traded near 60,000. After several rounds of re-negotiation, a listing has now been agreed to for the value of $1.18 billion.

👇 6) While Bitcoin prices have declined by -50% from when the listing was initially decided upon, now the value is -70% lower and when considering that the Blue Safari shares are trading -16% below their issue price of $10, the valuation is even lower.

👇 7) Hence we thought the trade offered quite some interesting upside and leveraged exposure into the Bitcoin rally.

👇 8) The shares on Wednesday night closed at $8.35 (hence the 16% discount) and while our clients received our report with that closing price, the shares have now rallied over the last few hours by +19.8% and are even up another +25% in after-hours trading.

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