American Bitcoin: A High-Flying Mining Story With A Valuation That's Running Out Of Road

Summary American Bitcoin has expanded its hashrate to 25 EH/s and delivered stronger mining output with improving operational efficiency. Revenue and adjusted EBITDA rose sharply as upgraded S21+ miners increased uptime and production. Despite operational momentum, the company's Bitcoin reserve and cash total far less than its liabilities. The stock trades at a large premium to its net asset value, leaving little margin for error. Until the company proves it can scale toward 50 EH/s while managing obligations, the risk-reward remains balanced. Investment Thesis I assign American Bitcoin Corp. (NASDAQ: ABTC ) a hold rating because, although the company has strengthening operational momentum, the stock price is already way ahead of its current net asset value. The fleet upgrade that has pushed the company's hashrate to 25 EH/s, along with its rising Bitcoin output and positive EBITDA, shows a company that is moving in the right direction. Nevertheless, the balance sheet remains burdened by miner purchases and lease obligations and, thus, the company's share price reflects the expectations of future expansion rather than the value of the Bitcoin the company currently holds. So, until the company can prove that it can scale toward its current 50 EH/s target while, at the same time, managing its liabilities, its risk-reward profile remains balanced. Therefore, I recommend for investors to wait for a better entry point or for further execution before taking a stronger stance toward the company. Background & Latest News American Bitcoin came to market on September 3, 2025 through a merger with Gryphon Digital Mining, and the pitch was a simple one: build one of the most efficient mining fleets in North America, and use those fleets to mine and accumulate a large and long-term Bitcoin ( BTC-USD ) reserve—a plan that the company has quickly jumped on. Per the company's latest 10-Q , and as of November 13, 2025, American Bitcoin has accumulated approximately 4,090 Bitcoin in reserve and has the mining power of a cumulative hashrate of 25.0 EH/s, up from its previous 10.0 EH/s , across four sites—all this while upgrading their fleet which resulted in higher efficiency Antminer S21+ miners that, ultimately, improved their Bitcoin mining operations. Planned Expansion from ~10 EH/s to ~50 EH/s Mining Capacity (American Bitcoin Corp. November 2025 Investor Presentation) Despite these technological improvements, the company's stock has had other plans. While company stock opened trading above $8 back in September, it has since fallen to the $2 range that included a 37% drop in a single day. But this decline wasn't due to any operational issues; rather, the decline was due to selling pressure that was caused by early investors/shareholders selling as their lock-up period expired which, essentially, placed a heavy supply of shares into a thin float and overwhelmed demand. Bitcoin's volatility obviously added to the anxiety, but, in sum, the selling was due to too much supply hitting too little demand as opposed to anything that has to do with the company's fundamentals. The result of all this selling pressure is a widening gap between the company's growing mining capacity and Bitcoin stack and the market's decreasing view of the company's equity. Latest Quarterly Results & Critical Financials American Bitcoin's latest quarter shows a company that is going in one direction: up—even though the stock has been on its way down. Per the latest 10-Q, revenue came in at $64.2 million, up dramatically from last year's $11.6 million. The drivers for this revenue growth was from the previously mentioned fleet upgrade to S21+ miners, which added a cumulative 15 EH/s, and a higher uptime across all sites. And, in total, the company mined 563 Bitcoin in Q3 versus last year's Q3 total of 190 and earned far more per coin due to a more expensive price per Bitcoin. Cost of revenue also rose to $28.3 million due to a higher energy use and a rise in the price of power. And depreciation more than tripled due to the company buying its larger, more advanced fleet. General and administrative expenses also increased because of the company's one-time merger costs as opposed to something such as a bloated overhead. So, although operating expenses are now elevated, they are not expected to repeat. Income Statement (American Bitcoin Corp. Q3 10-Q) I do want to add something that I believe is important: One area of the 10-Q that may have distorted the company's results, and maybe even confused some investors, was the company's loss on digital assets. However, this was more so an accounting issue and not a business issue. What I mean is this: When American Bitcoin became a standalone company, they had to start their Bitcoin reserve from scratch—this coming directly from the company's MD&A that I'll quote below: On March 31, 2025, in connection with the Transactions, Parent’s strategic Bitcoin reserve remained with Parent. Therefore, immediately following the effectuation of the Transactions on March 31, 2025, the Company had no Bitcoin in reserve. Starting April 1, 2025, the Company began to build its own strategic Bitcoin reserve. Thus, since the value of these coins are marked to market each quarter, if Bitcoin's price ends the quarter below the level where those coins were added, then the company must record a loss on paper even though the company sold no coins and no cash actually left the business. Thus, in sum, none of this affects the company's cash flow from mining. On a headline basis, the company reported $3.5 million in net income for the quarter versus last year's Q3 loss, and, to add to that, adjusted EBITDA reached $27.7 million, that essentially flipped the company from its negative territory in 2024 and highlights the operating leverage of the company's upgraded fleet. Reconciling Net Income to Adjusted EBITDA with YoY Changes (American Bitcoin Corp. Q3 10-Q) In sum, I believe the quarter showed four important qualities every investor should look for in these types of companies: a stronger mining output, a rise in efficiency, clearer margins, and an improved earnings power. Thus, we have a company whose financials are strengthening even though the stock price is falling, thereby widening the gap between fundamental performance and investor perception. Growth Drivers and Catalysts The company's path forward is shaped by two primary forces: a mining fleet that is currently scaling rapidly and a Bitcoin market that continues to tighten. Let's start with the mining fleet. American Bitcoin's Mining Fleet American Bitcoin now controls not only one of the largest—but also one of the most efficient —mining fleets in North America, one that I have already mentioned has jumped up from its previous 10.0 EH/s to its current cumulative hashrate of 25.0 EH/s after deploying 14.86 EH/s of new Bitmain Mining S21+ units. What these machines allow the company to do is to mine more Bitcoin per watt, thereby giving the company a cost edge while allowing them to accumulate coins in years where network difficulty may arise or the price of Bitcoin wobbles. Thus, the company's three-fold strategy of improving mining efficiency, avoiding selling, and compounding their reserve has pushed American Bitcoin holdings above 4,000 Bitcoin . On top of that, the company also has the ability to raise cash gradually though its at-the-market [ATM] program—launched in Q3 and noted as one of the company's Q3 2025 highlights in their 10-Q—and, therefore, has the flexibility to keep expanding its fleet without taking on any expensive debt or, especially, selling off its Bitcoin reserves. And management's path to 50 EH/s, if reached, would place the company among the largest publicly listed miners. Partnership With Hut 8 (American Bitcoin Corp. November 2025 Investor Presentation) A Tightening Bitcoin Market Meanwhile, the other half of the growth driver story for the company is in the asset American Bitcoin produces. I wrote an article on Bitcoin last month where I mentioned the three major drivers, or forces, that are defining Bitcoin's value going into the future. Thus, I will also relay them here given that these drivers are also important for the company since Bitcoin is their primary asset. Bitcoin's available supply continues to shrink as long-term holders, ETFs, corporates, and lending markets continue to pull coins out of circulation. More than 73% of Bitcoin is being held long-term, and in-kind redemptions are routing coins into ETF vaults as opposed to exchanges. There are also upcoming spot ETF approvals in South Korea and Japan that would remove even more supply from the market. And, for miners, these structural shifts matter because with fewer coins chasing hands and more coins held in custody, the long-term value of every Bitcoin produced continues to rise. In Sum Taken together, American Bitcoin benefits from these two primary forces: its own operational momentum and the tightening of Bitcoin's float. Should the company continue to grow its fleet and reserve at its current pace, then it should stand to capture more upside from Bitcoin's supply-driven cycle than its falling share price is suggesting. Valuation Since American Bitcoin is built around accumulating Bitcoin, the easiest way to value the company is by taking a look at where the digital asset stands today. As previously stated, per the latest 10-Q , American Bitcoin has accumulated approximately 4,090 Bitcoin in reserve that is worth around $376.8 million valued at the current Bitcoin price of $92,140. When we add back the company's cash of around $7.98 million, we get a total liquid asset base of $384.82 million; however, we still need to look at the company's obligations. The latest Q3 balance sheet shows a company with $587.37 million in total liabilities that is driven primarily by miner-purchase obligations and lease liabilities that are tied directly to the company's fleet expansion. Thus, below is a table of the math: Table Summarizing American Bitcoin’s NAV Per Share (Author) Therefore, on a strict net asset basis, American Bitcoin is deeply overvalued simply because its current liabilities, at least for now, exceed the value of its Bitcoin and cash, thereby proving mathematically that the stock is not trading at its present net worth; rather, the company is trading on the expectations of future mining growth, reserve compounding, and a strong Bitcoin cycle. Thesis Risk The biggest risk to American Bitcoin, so far that I can see, is its balance sheet. The company's miner-purchase obligations and lease liabilities loom large relative to the value of the company's Bitcoin and, should Bitcoin's price tumble or even remain flat for a few quarters, the company could inevitably face a tighter cash position while still needing to fund further fleet expansion. And, should there be any delay in reaching its 50 EH/s target, then that could weaken the core argument that the company's future production currently justifies today's equity premium. A second risk for the company lies in network difficulty. Bitcoin mining difficulty is continuing to rise as there is more capacity coming online globally. If the company's efficiency gains fail to keep pace with these increases in difficulty, then the number of Bitcoins mined per EH/s will fall, thereby pressuring margins and slowing down the company's reserve growth. Even small changes in difficulty can meaningfully alter the economics for any miner operating with large capital commitments. A third risk for the company lies in stock dilution. The company's at-the-market program gives the company flexibility, but it also means that future expansion could come at the cost of issuing new shares, which would thereby reduce per-share value unless the company's mining output grows faster than its dilution. And, finally, there are always risks that come from macro conditions. For example, a sharp drop in Bitcoin, a freeze in credit markets, or stress in crypto-linked financial products could, no doubt, reduce liquidity and push investors out of high-beta mining stocks. Conclusion & Investor Takeaway To summarize, American Bitcoin is executing well operationally, and it has a larger, more efficient fleet to go along with its rising Bitcoin production. But the stock's sharp disconnect from its net asset value means that investors are, as of right now, paying for growth that still has yet to be proven. The company must scale toward its 50 EH/s target, manage its liabilities, and grow its Bitcoin reserve without leaning heavily on its dilution or a perfect Bitcoin cycle. As of now, the setup is balanced: There is strong momentum on the operations side, but we also have a valuation that leaves very little margin for error. Thus, until the company shows clearer progression on expansion and balance-sheet strength, American Bitcoin remains a hold. A better entry-point, or even stronger evidence that future mining output will justify the company's current premium, would shift that view.