Summary Bitfarms remains in a strategic reset, focusing on a measured pivot to HPC/AI hosting and disciplined capital management. BITF's cautious approach contrasts with peers like MARA and RIOT, favoring minimal dilution, active BTC sales, and manageable debt over aggressive expansion and large BTC holdings. The company’s growth is centered on strategic diversification and capital efficiency, with a robust liquidity position and phased HPC/AI infrastructure plans. Despite recent share price rally and crypto market momentum, I maintain a Hold rating on BITF, prioritizing fundamentals over speculative upside. This article is a follow-up on Bitfarms Ltd. (BITF) (BITF:CA), since I last covered it in May this year. The last piece I published on Bitfarms was titled “ Bitfarms: Q1 Was A Strategic Reset .” In Q1, Bitfarms was forced to close operations in certain locations, like Argentina. Then, the groundwork for the pivot to high-performance computing [HPC]/AI hosting was under early planning and feasibility studies. The groundwork for the pivot then focused on moving capacity to the U.S. and securing power pipelines. I took a cautious Hold stance in the last coverage of BITF because losses persisted, the pivot was still in an early stage of execution, and the Argentina exit raised impairment risk, which could make operating losses persist for the coming quarters. Since my last coverage, BITF has rallied over 100%, mainly because of the share buyback program announced in July and, more recently, on the back of the broader momentum in the crypto market, which is spilling over to crypto stocks. The crypto market is currently seeing active momentum, which has extended to Bitcoin ( BTC-USD ) miners. Miners that have made their transition path to HPC/AI hosting clear and already demonstrated an energy pipeline with sites under development or exclusivity have shown stronger momentum that is beginning to look more sustainable. Despite BITF’s upside since I last covered it in May and the recent rally this week, I'm still leaning towards a cautious Hold rating - I'll outline the key reasons for this stance as we go along in this piece. BITF remains a promising Bitcoin miner and HPC contender (as the pivot takes shape) and won't qualify for an immediate Sell. But for investors who already hold BITF, I think holding or trimming into strength makes sense. And I think an upgrade to a Buy just based on the recent rally is tantamount to unhealthy speculation and is more driven by chasing green candles than sound analysis based on fundamentals. Bitfarms - The Strategic Reset Is Still Underway I viewed Bitfarms' Q1 as an initial strategic reset phase. And that reset also spilled over into Q2, influencing operations and financials on some fronts. Q2 saw some cost and impairment pressure, as the shutdown of operations in Argentina and related impairment deepened the operating loss. Q2 headline earnings quality didn't improve much compared to the revenue growth. Revenue grew 87% YoY to $78 million, while net loss was $29 million. Bitfarms is also an active seller of its mined BTC to create ongoing liquidity to fund operations; hence, it has not been in the same league as miners with substantial Bitcoin holdings who have enjoyed headline net income numbers due to fair value gains on their Bitcoin holdings. Bitfarms sold 1,052 BTC in Q2 at an average price of $95,500, which generated $100 million in proceeds. An additional 85 BTC were sold in July , generating $10 million. These proceeds fund the company's ongoing capex and growth initiatives, and even the share buyback program in which 4.9 million shares have already been purchased. I believe Bitfarms' treasury management approach of holding less BTC on the balance sheet should be one of the first key distinctions that should influence investors’ decision on investing in BITF, before even a deeper dive into other operational and financial metrics. Do you want pure-play exposure to a Bitcoin-heavy balance sheet, or do you want proactive capitalization on Bitcoin price gains for growth and operational efficiency? Because of the active sale of mined BTC, Bitfarms relies on much less dilutive capital raises compared to peers that pursue a full treasury hold strategy. Bitfarms had an equity raise on January 24 this year when 14.4 million common shares were issued under an ATM equity offering for net proceeds of ~$24 million, being all the shares Bitfarms has issued to date in 2025. Compared to miners who hold their mined BTC on their balance sheet and whose Bitcoin mining expansion and HPC/AI pivots have been more aggressive, dilution has been more manageable for Bitfarms. Peers like MARA Holdings ( MARA ) and Riot Platforms ( RIOT ) have announced a series of dilutive raises this year via ATM programs and convertible note offerings. These peers all have one thing in common: they hold most of their mined Bitcoin on their balance sheet, and their hosting expansion or pivot to HPC/AI has been more aggressive and ambitious. Bitfarms seems like the miner that treads more carefully. While the peers like MARA and RIOT have pursued aggressive strategies through dilutive capital raises, the scale of their physical expansion tells a similar story. For example, MARA’s stated global growth pipeline exceeds 3 GW, with a target of 75 EH/s mining capacity by the end of this year. RIOT is similarly focused on an ambitious, single-site expansion with hashrate targets of 40 EH/s by the end of 2025 and 45 EH/s in early 2026. If an aggressive growth strategy and a huge BTC stash on the balance sheet are your priority, which invariably increases risk exposure, then BITF might not be an appealing stock. But if capital discipline appeals to you, BITF remains one of the Bitcoin miners with that disciplined quality. That quality has also been infused into the company's HPC/AI expansion, which seems to be taking a more measured approach in execution. Bitfarms' overall pipeline size and the phased nature of its development - the confirmed 50 MW in 2026 and 300 MW in 2027 for its Panther Creek campus - is more conservative compared to a peer like Hut 8’s ( HUT ) multi-gigawatt ambitions and rapid project maturation. HUT currently has over 10,000 MW gross pipeline and around 3,100 MW under exclusivity (I went into detail on HUT’s ambitious pipeline in a separate HUT analysis published yesterday , September 12, here on Seeking Alpha) Bitfarms' total energy pipeline is around 1.3 GW. Though it can still be considered a significant size, the company has a different strategic focus based on how its execution is going. The company is not aiming for the highest hashrate or energy capacity but rather reallocating its megawatts toward HPC and AI infrastructure in North America, as evidenced by its acquisitions and site planning. This makes the company's growth less about mining and energy scale and more about a strategic diversification, which holds potential for superior economics per megawatt when paired with the minimal dilution and less debt. Data by YCharts In its pivot to HPC/AI, Bitfarms has a clear and funded plan for that expansion, which includes a $300 million Macquarie financing facility with an 8% interest. It also has an expected $18 million in proceeds from the Argentina closure from equipment sales, recovery of prepaid deposits, and others. Bitfarms also boasts a robust liquidity position of $230 million as of Q2 end. Another attraction is that, despite not being excessively dilution-heavy, debt is also well-managed. Debt-to-equity compared to peers also shows a healthy leverage profile, which ties back to the ongoing sales of the mined Bitcoin, helping to provide ongoing liquidity for operation and expansion. Takeaway Bitfarms is still in an active strategic reset phase. The planned closure of operations in Argentina is expected to be completed in November this year. The HPC pivot is also early-stage, compared to a peer like HUT that has seen site announcements and has a pipeline already under exclusivity. Bitfarms announced the partnership with T5 Data Centers for the HPC infrastructure build-out at the Panther Creek campus just last month, in which pre-construction design planning and development approval processes will be the next steps to advance Bitfarms' digital infrastructure investment and pivot to HPC/AI. While Bitfarms' balance sheet quality is coupled with the minimal dilution and manageable debt profile, which makes its capital structure less risky in terms of shareholder value erosion, I still believe beyond a broader crypto market momentum (which we are currently experiencing), most investors in crypto stocks would naturally gravitate towards miners seeing visible expansion in both hashrate and power capacity, especially those with shorter execution timelines, even if those miners are more heavy on dilution. To be an investor in crypto-related stocks means being inherently risk-tolerant. A miner that tries to play it safe might not be appealing to the broader crypto equities investor base, especially in a time of market momentum where expansion and execution outweigh prudence and where investors reward boldness and visibility. Also, considering that these periods of momentum are typically short-lived, Bitcoin mining companies with immediate growth visibility will be more attractive and likely command higher premiums. Based on these, I'm reiterating a Hold for BITF.