Summary I found BitFuFu deeply undervalued a few months ago relative to its peers based on a market cap/hashrate comparison. Despite being attractively valued, FUFU stock has performed poorly since then amid the lackluster performance of the broad crypto market. After studying historical BTC prices, I have uncovered an interesting relationship between BTC prices and the global money supply. If history repeats, we are looking at a potential BTC reversal. Bitcoin prices also seem poised to finally benefit from the previous halving event that occurred almost 2 years ago. There are a few reasons to consider BitFuFu as an investment vehicle to gain exposure to a potential breakthrough in Bitcoin prices. Being a crypto investor has not been easy in the past year or so. After seeing Bitcoin hit an all-time high north of $120,000, investors have had to stomach a staggering decline in BTC prices. At one point earlier last month, the drawdown from all-time highs eclipsed 50%. What is even more concerning is that this halving of BTC prices occurred within just four months. Although I do not have direct exposure to BTC, as I explained in a recent analysis on Coinbase Global, Inc. ( COIN ), the crypto winter has affected my portfolio indirectly because of my exposure to a few crypto stocks. This brings me to BitFuFu, Inc. ( FUFU ). Although I do not own BitFuFu stock, I have covered FUFU a few times over the past 12 months, as I found the company deeply undervalued relative to its peers based on a market cap/hashrate comparison. Today, amid interesting macro developments, I believe FUFU offers a unique value proposition to long-term investors wanting to gain exposure to BTC. Global Money Supply Growth Trends Paint A Promising Picture For Bitcoin Bitcoin has made a strong comeback since last Saturday. As of this writing, BTC is up 12% since the start of Middle East tensions and is trading just below $71,500. This trend reversal comes on the back of investors fleeing risk assets to seek the safety of assets with perceived hedging benefits, such as gold and Bitcoin. Given the macro risks we are facing today involve security risks, Bitcoin is actually in a unique position to emerge as the hedging instrument of choice among both retail and institutional investors, as it hedges against adverse geopolitical developments as well as sovereign risk. This is because BTC is decentralized, unlike any fiat currency. On the other hand, if inflation spikes as a result of persistently high oil prices, the Fed is likely to delay its rate cuts. This could be bad news for cryptos, including Bitcoin. Empirical evidence suggests cryptos perform well when the global money supply increases. The below chart illustrates this correlation between global money supply (M2) and BTC prices. Exhibit 1: Global M2 supply and BTC prices Bitcoin CounterFlow This is where things get interesting. Despite the Fed maintaining its cautious stance and wanting to closely evaluate macro indicators before turning more dovish, the global money supply has grown in the past few months, aided by favorable policy decisions by other central banks. Many central banks have cut rates in recent months. This list includes almost all GCC nations, Turkey, Russia, India, Mexico, Thailand, Switzerland, Australia, and even Poland. As the above chart illustrates, these expansionary policy decisions have led to a surge in M2 supply to almost $119 trillion as of mid-February. This represents YoY growth of 10.84%. This is a very interesting data point. Historically, the most aggressive BTC bull runs have coincided with strong spikes in M2 supply. More often than not, double-digit YoY growth in M2 supply has triggered Bitcoin bull runs. Today, given geopolitical tensions, we have every reason to believe that many countries will be forced to print money to fund their military budgets. If America’s active involvement in Middle East tensions lasts more than a few days, as initially expected, chances are that the U.S. will have to boost its money supply. This is consistent with historical evidence. For example, during World War II, the debt-to-GDP ratio rose to over 100% as the U.S. government was forced to print money to support its military spending. Exhibit 2: U.S. debt-to-GDP ratio Voronoi Given the positive correlation between global M2 supply and BTC prices, I believe we are nearing an inflection point for Bitcoin. Institutional Flows Remain Strong Relying on a single macro indicator is not a foolproof strategy to predict a reversal of BTC prices. Over the past 12 months, institutional investors have taken a real interest in Bitcoin and other cryptocurrencies. Monitoring institutional fund flows, therefore, can be an effective tool to identify trend reversals. Amid the crypto winter, Bitcoin ETFs have seen strong selling pressure since last October. According to Bloomberg data, between October 2025 and late February, Bitcoin ETFs recorded $9 billion in outflows. However, things have turned around since February 24. Since then, Bitcoin ETFs have recorded net inflows of $1.7 billion. This is a major turn of fund flows. I believe these inflows are driven by institutional investors wanting to gain exposure to Bitcoin as a hedging instrument amid global uncertainties. Bitcoin Halving Impact May Finally Be Felt In Coming Months The most recent Bitcoin halving occurred in April 2024, when the daily reward dropped from 900 to 450 BTC. Under normal circumstances, this should result in a lower supply of BTC. However, empirical evidence suggests that the opposite happens in the initial stages following a halving event. This is because thinly profitable miners resort to aggressive BTC divestitures to cover the cost of their mining operations. This creates selling pressure in the market. Now that we are closing in on the second anniversary of the latest halving event, I believe this treasury exhaustion among marginally profitable miners is coming to an end. This should pave the way for a supply deficit in BTC moving forward. There is a very real possibility of this expected supply deficit meeting a strong uptick in demand amid geopolitical tensions. This could set up a perfect platform for BTC prices to break through to the upside. Why BitFuFu Is A Great Pick To Gain Exposure To A Potential Bitcoin Comeback In addition to investing directly in BTC, investors can invest in crypto stocks to gain exposure to a potential reversal in Bitcoin prices. As I revealed in a separate analysis a few weeks ago, I doubled down on my Coinbase long position, as I believe Coinbase will benefit no matter which cryptocurrency dominates the world in the long run. My bet on Coinbase is a bet on the success of the blockchain technology. When it comes to Bitcoin, FUFU offers a unique value proposition to long-term investors because of a few reasons. BitFuFu is exposed to BTC prices directly through its self-mining business but also provides a shield against fully relying on price movements with its diversification into the cloud mining business. For those who are not familiar with BitFuFu, the company’s cloud mining business, which is nestled under the mining services segment, serves 648,000 registered users who pay fees to access its services. Exhibit 3: BitFuFu’s business model Investor Presentation If you take a look at some of the biggest public crypto miners, a big challenge faced by them is their reliance on block rewards. While BitFuFu also earns a chunk of its revenue from block rewards, the cloud mining business helps the company earn fee-based revenue by selling mining contracts. This makes BitFuFu one of the most diversified public crypto miners. In the third quarter of 2025, this segment accounted for ~68% of total revenue ($122.9 million). Exhibit 4: BitFuFu’s segment revenue in Q3 2025 10-Q Despite operating in two main business segments, BitFuFu has the flexibility to allocate resources to the most rewarding business at a given point in time. This is achieved with the use of its Aladdin system, which routes hashrate to maximize yield. This flexibility makes BitFuFu even more attractive, as it enables the company to prioritize profitable growth rather than diversifying for the sake of it. When crypto markets turn a corner, the company can effectively prioritize the self-mining business, which exposes investors to asymmetric upside. When the opposite is true, BitFuFu can focus on its cloud mining business to generate sufficient cash to function without having to deplete its crypto treasury. This balanced business model is one of the main reasons why I fell in love with the company a few months ago. Energy Investments Boost BitFuFu’s Appeal I have discussed BitFuFu’s energy investments in detail in previous analyses. I thought of touching on them yet again today given the uncertain geopolitical environment we have found ourselves in. Energy prices have already spiked due to Middle East tensions, and this is not good news for Bitcoin miners, as energy is one of the biggest operating costs for every miner. Before this escalation in tensions, I always looked at BitFuFu’s energy investments as a cost-saving measure. But today, I consider these investments to provide the company with a competitive edge amid global uncertainties. The company’s energy independence strategy is centered on expanding into regions, sometimes even remote, with cheap access to renewable energy. The Ethiopian Hydro Shield is a classic example of this. BitFuFu now operates an 80 MW data center in Ethiopia. Since this facility is powered by hydroelectricity, it makes the company less immune to oil price shocks as well. Exhibit 5: Data center expansion Investor Presentation In addition to helping BitFuFu secure energy independence, these investments will also be accretive to margins, given that the company is exposed to energy prices well below the world average in most of these regions. The Healthy Balance Sheet Adds Another Layer Of Safety Given the many uncertainties facing the crypto industry, it is almost impossible to talk about a miner’s prospects without commenting on its balance sheet health. BitFuFu, thankfully, has a very strong liquidity position today. This makes the company immune to geopolitical shocks in the foreseeable future. The company ended Q3 2025 with ~$255 million in cash and equivalents (this includes digital assets as well). BitFuFu, in fact, ended Q3 with a negative net debt position. Against total long-term debt of $141.3 million (including payables), the company had total liquidity of $254.8 million. This translates to a net cash position of almost $114 million. Based on BitFuFu’s January performance update , the company held 1,796 BTC on its balance sheet, up from 1,780 the month before. This MoM growth is a sign that BitFuFu is continuing to hoard BTC rather than being forced to liquidate its reserves. This is a good sign at a time when many less-profitable miners are liquidating their BTC reserves to cover operating costs. In addition to this already strong liquidity position, BitFuFu has an option to tap into capital markets easily as well. The $150 million ATM equity offering that was approved last June still has $144 million in remaining capacity. Risks BitFuFu, similar to its crypto mining peers, relies heavily on favorable crypto market conditions. Despite its diversified business model, the company’s fortunes remain closely tied to BTC prices. A crypto winter that lasts years, not months, will prove to be a massive drag on its financial performance. Investors should also keep an eye on changing energy regulations in global regions where BitFuFu has expanded into. This risk became evident when the company revealed that a new tariff structure was announced in Ethiopia late last year. While the new prices are still very economical compared to many other global regions, this highlights the need to keep a close eye on the regulatory environment for BitFuFu’s data centers. Takeaway Bitcoin has made a strong comeback since the U.S. and Israel attacked Iran last Saturday. This is consistent with the hedging benefits associated with BTC. Looking at the long term, I believe Bitcoin prices are likely to be driven by global money supply movements rather than a risk-off trade. Based on recent M2 supply trends, BTC seems to be entering an inflection point that could help prices break through to the upside. Amid these interesting developments, I view BitFuFu as offering investors a unique value proposition with its balanced business strategy and energy independence.
