One way to get leverage to the price of Bitcoin (CCC:BTC-USD) is by owning shares of a mining company like Bit Digital (NASDAQ:BTBT). The shares are easily affordable, and BTBT stock is definitely a fast mover.
Of course, with fast movement comes heightened risk. It’s wise to reduce one’s position size when the potential for volatility is present.
So, please be careful and don’t load the boat on BTBT stock. That being said, if you’re going to make a small investment in a cryptocurrency miner, Bit Digital would be a solid pick.
Plus, you might be surprised to find that there’s a green/ESG (environmental, social and governance) angle here. Not only that, but this stock offers an unusually good value in a time when stock and cryptocurrency prices are often elevated.
BTBT Stock at a Glance
First of all, let’s acknowledge that BTBT stock, like many crypto-mining stocks, is sometimes strongly correlated to the Bitcoin price.
This was particularly apparent from May to mid-July of this year, when the Bitcoin price declined sharply. During that time, a number of cryptocurrency-mining stocks lost value.
BTBT stock fell when Bitcoin corrected during the summer, but it also rallied recently. Specifically, the stock hit a short-term peak of $19 in early August. However, there could be much more room to run. Back in January, the Bit Digital share price reached a 52-week high of $33.
And here’s the kicker: BTBT stock’s trailing 12-month price-to-earnings ratio is just 12.37x.
That figure should catch the attention of contrarian and value-seeking investors. It just goes to show that there could be bargains hiding in just about any market sector, if you’re willing to find them.
Short Squeeze Candidate?
Since BTBT stock is low-priced (around $10 as of Aug. 24), this leads us to a billion-dollar question.
Could it be a prime candidate for a short squeeze? After all, 2021 has provided excellent returns to traders who can correctly anticipate Reddit-fueled run-ups.
Not long ago, InvestorPlace Web Editor Nick Clarkson identified five stocks which experts think are ready to pop.
And, at the top of Clarkson’s list was BTBT stock.
He cited data derived from the experts at Fintel, who evaluated a number of stocks’ short-squeeze potential and then ranked them on a scale of zero to 100.
The big winner was Bit Digital, with rating of 95.41 out of 100, suggesting strong short-squeeze potential.
This might not be the only reason to buy BTBT stock. However, there was the sharp rally to $33 in early 2020, when meme-stock mania was in full effect.
A similar share-price move could happen again if the Reddit crowd decides give Bit Digital a boost.
In any case, short-selling this stock now would be a dangerous proposition, and isn’t recommended regardless of whether you like the company or not.
So, we’ve covered the value angle, and the short-squeeze angle.
Yet, there’s still one more angle which makes BTBT stock intriguing: it’s actually a viable green/ESG investment in the crypto space.
Today’s mindful investors are often seeking to invest in sustainability focused businesses. However, Bitcoin mining has a reputation for consuming a lot of energy.
The Bit Digital team is clearly aware of this, and is taking measures to address it.
It’s easier said than done — no doubt about that. The company’s hash power is enormous, as Bit Digital owned 32,500 miners as of June 30, with a maximum total hash rate of 1.92 EH/s.
Can Bit Digital carry on mining operations at this scale, and do it sustainably?
If we’re to believe the company’s presentation, the answer is yes.
In the presentation, Bit Digital CEO Bryan Bullett assures that his company’s mining fleet “has utilized a significant portion of renewable or carbon-free energy.”
Furthermore, Bit Digital has engaged an independent ESG consultant “to benchmark our sustainability, help us set targets, and track progress.”
Additionally, the company has a hosting partnership in Alberta, Canada, with “a company that develops mining sites on natural gas wells.”
The idea is to re-purpose the waste gas for cryptocurrency mining. With that, “it can be efficiently burned in a way that far reduces its greenhouse gas effect,” Bullett explains.
As we’ve seen there are a number of reasons to own a small stake in BTBT stock.
It’s a surprisingly good value play in the crypto space. There’s the potential for a short squeeze, as well.
Finally, there’s the sustainability angle. So, for any or all of these reasons, feel free to give Bit Digital a try.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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