Cipher Mining: Building For The Future, But Still Bleeding

Summary Cipher Mining reported Q2 2025 results with strong revenue growth and expanding cash reserves, but escalating losses raise profitability concerns. CIFR's investments in infrastructure, notably the operational Black Pearl data center, are expected to boost hashrate and future ￰0￱ a solid balance sheet, rising depreciation, financial costs, and shareholder dilution from equity issuances pose significant risks for ￰1￱ the leveraged, volatile nature of CIFR as a Bitcoin proxy and ongoing losses, I maintain a Hold rating on the stock. I wrote about Cipher Mining ( CIFR ) a while back , and it always looked like a leveraged play on BTC. Q2 2025 earnings just proved this – revenue from mining is growing, but losses are increasing even ￰2￱ seems like the cost structure is becoming problematic and revenue is not catching ￰3￱ balance seems to be strong – cash is growing, and equity as ￰4￱ gives financial reserves runway to survive bad quarters.

Still, profitability is a ￰5￱ the company solves their losses, it's unclear how long this runway will last. Q2 Financial Results CIFR reported their Q2 results , and still they show signs of strong balance and growing revenue, but at the same time, losses are making it ￰6￱ from BTC mining was $43.6 million, compared to $36.8 million a year ￰7￱ is 18% growth, which shows that operations are ￰8￱ is that at the same time, the loss grew as well, almost 3 times, from -$15.3 million to -$45.8 million. Half-year results show it even worse; in 2024 H1, the company had a net income of $24.6 million, but in 2025 H1, it had an -$84.8 million ￰9￱ in H1 was $92.5 million, compared to $84.9 million a year ￰10￱ be fair, it signals to me that costs are increasing and revenue is not catching ￰11￱ Alpha Balance is good; cash reserves jumped to $62.7 million, compared to $5.6 million in ￰12￱ means that the company has reserves to continue operating even in bad ￰13￱ assets increased to $1.02 billion (from $855 million).

This seems to me like a strong foundation, which gives some security for ￰14￱ biggest problem, in my opinion, is lack of ￰15￱ Q2 loss was lower, I could even say that the quarter was 'investing into growth.' But -$45.8 million per quarter when revenue is $43.6 million shows that the structure is not ￰16￱ also does not give much security, as the cash reserves might run out as ￰17￱ Alpha Good News Bitcoin reserve ￰18￱ worth is somewhere around $112.1 million, when it was $92.7 a year ￰19￱ means that CIFR has a bigger reserve for the future, which could be a financial amortization when markets ￰20￱ had an ATM emission as well, where they raised around $85.7 million and took a loan of $172.5 million by issuing convertible bonds with a 1.75% coupon until ￰21￱ is quite cheap financing if you ask me, which gives them some runway ￰22￱ got investments ￰23￱ invested $164.4 million into new equipment and $55.9 million into Black ￰24￱ means that they are increasing hash rate potential and strengthening their position before next ￰25￱ Pearl One of the biggest catalysts I believe happened in Q2 2025 is new data center construction in ￰26￱ project is called Black Pearl , and it should generate 300 ￰27￱ news, it's already connected to the ￰28￱ phase has started with 150 MW ￰29￱ rest of it should be turned on in the following ￰30￱ into the project were somewhat more than $126 million; most of it went to construction, infrastructure, and ￰31￱ expects that Black Pearl will increase hashrate and will become main revenue ￰32￱ project showed that CIFR not only talks but at the same time ￰33￱ that they can coordinate such ￰34￱ difference from competitors is that they already have a working data ￰35￱ one thing I noticed is that Black Pearl does not have fixed electricity ￰36￱ that means that costs can vary depending on the electricity market and spot ￰37￱ one side, this means they can sell excess power and get some revenue; from the other, that means they can get some pressure on their revenue as ￰38￱ Pearl (Cipher Mining Announces August 2025 Operational Update) Risks I have told about the losses, but let's dive deeper into ￰39￱ depreciation in Q2 2025 was $44 million, almost double compared to $20 million a year ￰40￱ as I said, infrastructure is growing; that is good, but depreciation will increase with it as well, so we might see pressure on ￰41￱ brought losses as ￰42￱ Power Agreement value fell and cost -$15.5 ￰43￱ is a good reminder that financial instruments are risky to everyone and especially to the company that relies on them.

So, the worst thing is that the company's equity is growing not through profits, but through emissions, which dilutes current shareholders and increases risk, while ROI stays ￰44￱ the same time, issuing bonds is just increasing ￰45￱ thing is cash ￰46￱ of the revenue comes from selling BTC, which is considered an ￰47￱ means that operational results are ￰48￱ Alpha For Portfolio Building I have taken a look at CIFR and BTC from econometric ￰49￱ the image is quite ￰50￱ is like a leveraged play on ￰51￱ BTC goes up, CIFR goes higher even more, but it has the same effect when going ￰52￱ BTC goes down, so does CIFR, sometimes even ￰53￱ is another interesting ￰54￱ you look at the chart, from first sight it would look like they are correlating one to one, but in reality, the correlation is around ￰55￱ means that the connection exists, but it's not perfect.

Why? Because daily numbers are noisy – CIFR has its own additional risks, like operations, electricity pricing, and so ￰56￱ this is why, even though the direction of BTC and CIFR is the same, daily fluctuations may differ. I took weekly numbers, and the correlation immediately looks better because the noise is ￰57￱ risk is daily, not weekly; this means that when retail investors spot that they 'move together,' CIFR might have already made a ￰58￱ Chart of CIFR and BTC (Pink) Price Action (TradingView) Granger causality and VAR models showed that BTC does not statistically predict ￰59￱ other words, there is no model that shows that 'BTC makes a move and CIFR follows.' Most of the time, they move together at the same ￰60￱ model showed instability, so that means that they both together make up a really unstable ￰61￱ here shows the most interesting ￰62￱ volatility movements per day are somewhere between 3-5%; at the same time, CIFR might be moving 20-40%.

This does not mean that we might see the price increasing or decreasing in such numbers; this means that we might get days where this ￰63￱ holding CIFR means you take more risk than holding BTC at this ￰64￱ should you take from my rant? That CIFR is a leveraged play on BTC; it may move and give you really big profits on bull markets or give you a lot of losses on bear ￰65￱ charts and econometrics show the same: correlation exists, but causality doesn't, but the risk is a few times higher. So, investing in CIFR means that you take the possibility of watching the stock move irrationally and ￰66￱ Analyst model Summary Cipher Mining's Q2 2025 results show two ￰67￱ is increasing, the balance is strong, and cash reserves are ￰68￱ company is investing in infrastructure for new projects like Black Pearl (which, as mentioned, is already operational and should become a catalyst).

All this shows good ￰69￱ at the same time, the losses are ￰70￱ company recorded quite large losses in H1 2025, when in H1 2024 they had ￰71￱ depreciation and financial costs make profitability questionable. Furthermore, part of the revenue is coming from BTC selling, not from operations, and share issuance dilutes current ￰72￱ is why I am ranking it hold ; it's now just speculation on BTC, and I see too many risks. Previously, I was bullish; now, it is time to take profits and wait for new entries if they come.