KBW is taking a more cautious stance in the crypto mining sector. The Wall Street investment bank downgraded Bitfarms (BITF), Bitdeer (BTDR), and HIVE Digital (HIVE) from Outperform to Market Perform.
In a series of notes to investors published on Monday, the bank noted that while the industry’s shift toward high-performance computing (HPC) and AI hosting is compelling, the path to monetization is fraught with execution risks and long lead times.
Facing a historically low margin environment following the 2024 halving, bitcoin miners are rebranding themselves as digital infrastructure providers to capture a slice of the AI gold rush. By converting warm structures—facilities already equipped with high-density power and cooling—into AI-ready data centers, these companies hope to exchange volatile mining rewards for stable, long-term business contracts.
However, the transition is not a simple pivot; HPC’s huge capital requirements and rigorous uptime standards are forcing a high-risk divide between those who can successfully modernize and those left with stranded assets.
Bitfarms: the long wait for Sharon
Analyst Stephen Glagola downgraded Bitfarms to market perform, noting that while CEO Ben Gagnon has a strong view, the market has already priced in the potential of its 120 megawatt (MW) site in Sharon, Pennsylvania.
Despite raising Bitfarms’ price target to $3.00 from $2.50, the analyst doesn’t expect a formal leasing deal to materialize until the second half of 2026. Additionally, he expressed skepticism regarding Bitfarms’ potential entry into the AI cloud in Washington and highlighted concerns about rising leverage.
Shares were unchanged in early trading.
Bitdeer: scale versus uncertainty
Bitdeer’s downgrade was accompanied by a significant price target cut, dropping to $14 from $26.50. While KBW acknowledged that Bitdeer is on track to become a leading public miner by 2026 through its vertically integrated Sealminer technology, it warned that the company’s increasing focus on cloud AI adds layers of uncertainty.
The analyst cited the current small scale of the business, concentrated shareholder control and “exposure to related parties” as key reasons for staying away.
The stock rose modestly to $13.91.
HIVE: Lacks a “durable edge”
HIVE Digital saw its price target cut to $3.50 from $11.00 as Glagola questioned the durability of its AI cloud strategy. The analyst noted that HIVE’s reliance on partner channels and equipment financing leaves it in a “suboptimal position” compared to data center-only competitors.
Additionally, KBW pointed out HIVE’s negative pre-tax ROIC, suggesting that the company is expanding its mining hash rate without generating sufficient operating returns in a suppressed hash price environment.
HIVE rose 0.3% to $3.04 at press time.
Across all three names, the investment bank’s message was consistent: The transition from miner to data center operator is a capital-intensive journey that may require more dilution and patience than investors currently anticipate.
Read more: Tailwinds in early 2026 for bitcoin miners as hashrate falls and profitability improves: JPMorgan
