At Extreme Investor Network, we are always on the lookout for unique and underappreciated investment opportunities that can provide our members with significant upside potential. One such opportunity that we have identified recently involves converting bitcoin mining sites to high-performance computing (HPC) data centers.
According to a recent note from Morgan Stanley, there is a growing trend among tech companies to consider converting bitcoin mining facilities to data centers. The investment bank believes that this conversion could offer substantial benefits, with the potential for a REIT structure to be the ultimate end game for these assets.
Morgan Stanley’s valuation of a U.S. bitcoin mining facility ranges from $2 to $3 per watt of capacity, while the value to a hyperscaler like Microsoft or Amazon of saving three years in powering up a new data center is more than $10 per watt. This presents a compelling opportunity for investors looking to capitalize on the growing demand for data centers.
Several companies in the bitcoin mining industry, such as Bitdeer Technologies Group, Cipher Mining, TeraWulf, Iris Energy, and Galaxy Digital, could benefit from this conversion opportunity. While these companies are not covered by Morgan Stanley research, they are all rated as buys by analysts and have significant potential upside based on consensus price targets.
Cipher Mining, in particular, has been actively pursuing data center conversion opportunities for hyperscaler customers and has the expertise and resources to succeed in this transition. Similarly, TeraWulf has attractive sites for data center development and deep expertise in power projects, making it a potential player in this space.
Overall, the conversion of bitcoin mining sites to data centers presents a compelling investment opportunity for investors looking to capitalize on the growing demand for computational power in the digital age. As the shortage of new data centers continues to grow, companies that are able to successfully convert their facilities stand to benefit from substantial upside potential. Stay tuned to Extreme Investor Network for more unique investment opportunities like this one.