Image Source: Unsplash
 

I have been a Bitcoin and Ethereum holder for many years. Over the past few months, Bitcoin continues its evolution from speculative asset to strategic investment, increasingly embraced by major institutions. Recent reports from Bloomberg highlight significant shifts in Bitcoin holdings, reflecting an intriguing dynamic. While some large-scale holders/whales (miners, offshore funds and anonymous wallets) have offloaded substantial amounts, approximately half a million coins, institutions like ETFs, corporates and asset managers are actively seizing these opportunities to diversify their investment portfolios. The institutional interest in Bitcoin is grounded in its growing reputation as a hedge against macroeconomic uncertainties and currency volatility, particularly amid persistent inflationary pressures.

Think about this: recent reports from Galaxy Digital indicate that Bitcoin's volatility has dropped below that of both the S&P 500 and Nasdaq indices. This is a significant development, as Bitcoin has historically been more volatile, thus deemed riskier, than traditional equity markets. But that's no longer the case.

Amid these developments signaling the crypto market’s maturity, Circle Internet Group's IPO in June 2025 was another milestone highlighting broader mainstream acceptance. The company went public at $31 per share, raising around $1.1 billion and initially valuing Circle at roughly $8 billion. Shortly after trading began, Circle's stock price soared dramatically to almost $300 per share. This rapid increase pushed the company's market value to nearly $70 billion, a kind of IPO performance reminiscent of the booming markets of the 1980s. Of course, it has since dropped down and stabilized at around $180 to $200 per share, still sevenfold of IPO price. 

Admittedly, while crypto is gaining mainstream attention, most crypto mining company stocks have dropped following the Bitcoin halving, reflecting industry-wide pressure on margins and profitability. The halving reduces the rewards miners receive for validating transactions by 50%, thereby increasing mining difficulty, driving up costs, and consequently compressing profit margins.

Take Marathon Digital Holdings (Nasdaq: MARA), for example. The company swung from a healthy net income of $337.2 million in Q1 2024 to a steep net loss of $533.4 million by Q1 2025. BitFuFu (Nasdaq: FUFU) also faced challenges, turning from a solid profit of $35.3 million in Q1 2024 to a net loss of $16.9 million in Q1 2025. Stock performance mirrored these struggles. 

However, overall I am optimistic about BitFuFu due to its rapidly growing hash rate (computational power) and electricity or power capacity, suggesting very promising earnings for Q2 and Q3. Despite the challenging environment, BitFuFu's recent operational updates reveal resilience. From Q1 through June 2025, the company demonstrated notable growth across key operational metrics:

These two metrics are critical indicators of a cryptocurrency mining company's performance because a higher hashrate directly increases the probability of successfully mining new Bitcoin blocks, thereby boosting revenue potential. Simultaneously, expanded power capacity indicates robust infrastructure capable of supporting sustained operational growth, crucial for maintaining profitability amid rising operational costs.

While hashrate is important, there’s another key metric to keep an eye on: hashprice. This refers to the revenue generated per unit of hashrate, essentially telling you how profitable your machines are at any given moment. If you look at the chart, you'll notice that network hashrate bottomed out around April, but saw a strong rebound throughout June and into July. This kind of fluctuation isn’t unusual—it tends to move in response to Bitcoin’s price, mining difficulty, and network-wide computational power.

(Click on image to enlarge)

What stands out here is the momentum building through Q2 and into Q3. With rising hashrates and a relatively strong hashprice environment, the conditions are aligning favorably for the whole crypto mining industry. 

Additionally, BitFuFu's Bitcoin holdings grew substantially year-over-year, rising from 1,072 BTC in Q1 2024 to 1,835 BTC by Q1 2025, a notable increase of 71.2%. This expansion in holdings demonstrates a strategic and disciplined approach to treasury management, aligning closely with shareholder interests and preparing the company to capitalize on potential market improvements. 

Similar to most mining companies, BitFuFu generates revenue from both self-mining and cloud mining, but unlike some peers, its primary revenue stream comes from cloud mining services. According to its monthly operational updates, client demand for cloud mining has surged, with BTC output from these contracts rising from 173 BTC in April to 387 BTC in June.

This growth trend aligns with broader market behavior I discussed at the beginning of the article: more companies and financial institutions like BlackRock and Fidelity are acquiring BTC as a strategic hedge and diversification tool. As a result, I believe cloud mining will be a major driver of BitFuFu’s topline revenue growth going forward.

Also to keep in mind that unlike self-mining, cloud mining shifts BTC price risk to clients. Clients pay a fixed percentage of fees in exchange for mining returns, which helps stabilize BitFuFu’s revenue even in volatile markets.

As of June 2025, Marathon Digital Holdings (MARA) and BitFuFu (FUFU) exhibit notable differences in market capitalization, hash rate, and power capacity. Here's a comparative analysis:

While MARA commands a higher market capitalization and valuations per operational metric, BitFuFu's lower valuations could present big opportunities for investors seeking exposure to the crypto mining sector at a different risk-reward profile.

In summary, the crypto market is undeniably entering the mainstream. With the current administration, including President Trump, showing strong support for digital assets, think about "Trump Coin", the landscape is shifting favorably for cryptocurrencies. While the recent Bitcoin halving has temporarily impacted miners' earnings by reducing block rewards, this is a cyclical challenge. Companies with robust cash flows and expanding power capacities like BitFuFu are well-positioned to thrive in the long term.

If BitFuFu successfully achieves its ambitious goal of reaching 1 GW  of mining capacity by the end of 2026, it's reasonable to anticipate significant growth in the company's valuation. Doubling the company's valuation isn't guaranteed but is quite plausible, especially considering how critical hashrate and operational capacity are for profitability and investor sentiment in the crypto mining sector.

More By This Author:

ATRenew: Riding China’s Pre-Owned Electronics Wave
Tariffs May Not Be The Biggest Problem Apple Is Facing Right Now
BitFuFu Jumps 26% After Earnings—What’s Driving The Surge?