Summary Bitfarms remains a Hold as massive dilution and execution risks overshadow its pivot from Bitcoin mining to HPC/AI infrastructure. BITF's share count surged from ~400M to ~600M post-Riot bid, with further dilution likely from $588M convertible notes. The Stronghold acquisition gives BITF valuable PJM interconnection rights, but regulatory approvals for its Moses Lake HPC/AI buildout remain a key hurdle. Tomorrow's decision on the 18 MW Moses Lake HPC permit could finally unlock Bitfarms' long-awaited HPC pivot. Over the years, Bitfarms Ltd. ( BITF ) hasn't been made the list of my favorite Bitcoin ( BTC-USD ) miners, but I’ve followed the company closely, hoping for a turnaround. I saw potential in mid-2024, when a hostile takeover bid was floated between Bitfarms and Riot , when Riot ( RIOT ) offered $2.30 per share for Bitfarms. One would have naturally thought the $2.30 price would have been the new floor for BITF. But that floor broke after the takeover offer was rejected, and the stock slid below $1 at one point in 2025. I downgraded BITF to a Hold following the coverage around the takeover bid, and maintained a cautious Hold stance in my subsequent coverage of the stock throughout 2025. My BITF rating history (Seeking Alpha) Moving on, some historical context is needed as to what went down operationally at Bitfarms in the past few quarters for an explanation into today, how those developments have affected shareholders, before an update into potential growth drivers and any potential headwinds to be aware of. Bitfarms - Surviving The Dilution Bitcoin miners are known to be dilutive, but Bitfarms has operated on another scale over the years. Since that Riot takeover bid mid-2024, Bitfarms has weaponized lots of equity to fund a total balance sheet overhaul. While this has effectively saved the company from bankruptcy and a hostile takeover, it lowered per-share value for long-term holders a lot. At the time of the Riot bid, there were roughly 400 million shares outstanding. By the end of Q3 2025, that number jumped to 557 million shares ( Q3 2025 MDA ). In October, the 2024 ATM program was closed and the last batch of 165 million shares issued since March 2024 in the ATM run in that final month were issued. Today, more shares have trickled in from RSUs and the settlement with Riot Platforms, as we are now staring at ~600 million shares outstanding. But the dilution story is not over there yet because Bitfarms raised another $588 million via convertible notes in late October last year, which implies future dilution coming once the stock trades above the $6.86 conversion strike price. By this raise, management seem to be aware of the dilutive optics BITF had over the past quarters (not good for future raises), and they structured a capped call on the $588 million raised, capping dilution up to $11.88. But at the current share price, that called call means nothing, and we can consider that money spent on the capped call as sunk capital at the current stock price that would have gone toward, maybe, scaling Moses Lake to compete with peers in the race for HPC and AI. Riot Bid (around May 2024) Current (Jan 27, 2026) % Change ~ Stock Price $2.30 $2.58 +12% Shares Outstanding ~400 million ~600 million +50.0% Market Cap ~$920 million ~$1.55 billion +70% The dilution has hit BITF hard, BITF market cap has essentially doubled since the Riot bid, but the stock price hasn't moved much to reflect this valuation because of heavy dilution. Investors are basically paying around 70% more for the company today than they were during the Riot bid, yet getting roughly the same stock price. Bitfarms - Dilution Deep, But Why It's Not An Outright Sell While the dilution has hit Bitfarms hard the past quarters, labeling this an outright Sell would mean ignoring all the physical transformation happening on the ground. Management is effectively burning the mining ships in South America to build an HPC fortress in North America. Bitfarms pivot to HPC/AI hosting has an added advantage, in that the company is owning an asset base for power generation, not just power contracts behind the grid. Through the acquisition of Stronghold Digital , Stronghold brought in all the power generation assets as well as with PJM interconnection rights included. PJM is the RTO that manages the electric grid and wholesale power markets across much of the U.S. Large load interconnections require approvals which often take years to secure. Bitfarms acquisition means it already owns those rights from Stronghold as part of its current portfolio and can import 142 MW from PJM directly at the moment. This is where all eyes currently focus on Bitfarms as it navigates this infrastructure repurposing phase. The Hearing Examiner meeting regarding the 18 MW Moses Lake facility in Washington is coming up tomorrow (Jan. 28th) for the Grant Node permits, marking approval of the final permits needed to fully convert the Moses Lake to HPC/AI workloads. And an approval tomorrow will greenlight the plans to install the high-end NVIDIA GB300s (part of a $128 million binding agreement to upgrade that site), which has been sitting on the sidelines. If things go this way, there could be a temporary uptick in stock price, which will benefit swing traders. But I still think this doesn't mean an actual multi-billion HPC deal will be booked in the near future. On the other hand, if the examiners delay the decision tomorrow, Bitfarms’ target of a December 2026 build-out will start to look much less feasible. Bitfarms already sold its last South America assets in Paso Pe and Yguazu and announced its final exit South America, meaning management has bet the entire farm on these U.S. approvals and sites. Tomorrow is the first real test of whether that bet was worth the massive dilution I talked about earlier. There is currently excitement around the hearing, and that has dominated the ticker tag of BITF on X (Twitter) in the past few days. The market is assuming the conditional use permit and other land use licenses decision at the hearing will be a binary 'Yes/No' outcome. But it is likely not. The regulatory and compliance processes are the next stages Bitfarms has to cross. Delays in certain approvals could make 2026 a muted year for Bitfarms while peers like Cipher Mining ( CIFR ) with meaningful HPC revenue already projected for the latter part of 2026, could steal most of the momentum. While the Stronghold acquisition has given Bitfarms access to self-generated power behind the grid, they are still navigating a complex regulatory and operational process to convert those MWs used previously for mining into MW for AI workloads, and to stay compliant with PJM and reporting requirements at the same time. Non-compliance has made Stronghold itself pay a $1.4 million settlement fee early last year for past PJM rule violations. Taken together, these factors are why I stay cautious here. The dilution is already sunk. The U.S. pivot still sits on multiple approval layers. Execution risk remains high until permits convert into live workloads and HPC contracts. Takeaway This is a Hold for me until the HPC/AI pivot takes real shape. That said, BITF could be bid up if investors who feel they missed out on other Bitcoin miners turned HPC/AI pivots chase it. But risks abound, including dilution risk to fund operations for the HPC build out, especially since Bitfarms does not plan to operate as a shell infrastructure but own the actual GPUs and run them. BITF institutional ownership (Fintel) As per data shown in the chart above, institutions have increased their BITF holdings, especially since the second half of last year. But I, personally, feel this is just smart money chasing what they feel could be the next Bitcoin miner turn HPC/AI pivot, because of how the likes of IREN ( IREN ), TeraWulf ( WULF ), and peers surged late last year on announcements of multi-billion dollar HPC deals. This is what I would call the smart money extrapolation bias. And I'm betting against them for now (or better put, not following the smart money bandwagon). They've been wrong before when they were aggressively upgrading BITF to a Buy with price targets ranging from $5 to $6 ( HC Wainwright upgraded to $5.5 target last October and B. Riley upgraded to $7 with a Buy rating), not considering the dilutive machine the company had become and the operational retrenchments and shut down in some regions that have followed. I maintained a Hold then, and in retrospect that was the right call. I'm not saying Bitfarms is a bad company to avoid, but overhangs still exist and there are HPC/AI plays that should be better investment options at the moment.
