Gryphon Digital Mining: A Pure-Play Bitcoin Miner with a Focus on Revenue Generation

Gryphon Digital Mining (GRYP) is a cryptocurrency mining company focused on Bitcoin. The company generates revenue by directing the hashrate of its ASIC mining machines to pools. Gryphon has a strong balance sheet and is well-positioned to take advantage of the growing demand for Bitcoin mining. The company's recent reverse takeover of a special purpose acquisition company (SPAC) has provided it with additional capital to further its growth.

Gryphon Digital Mining, Inc. (NASDAQ: GRYP), a pure-play cryptocurrency mining company focused on Bitcoin, has recently completed a significant strategic move. The company has approved a reverse takeover by American Bitcoin Corp. (ABTC), a Trump-backed firm, which will create a new, Nasdaq-listed entity. This merger is expected to provide Gryphon with substantial additional capital and operational resources to bolster its Bitcoin mining operations.

Gryphon generates revenue by directing the hashrate of its ASIC mining machines to pools, primarily under the Full Pay Per Share (FPPS) model. This model ensures relatively stable payouts and includes transaction fees, making it more profitable than traditional PPS models. The company's recent financials indicate a need for capital infusion, with Q2 2025 revenues declining to $1.4 million from $5.5 million in Q2 2024. The reverse takeover with ABTC aims to address this financial strain.

American Bitcoin Corp. brings a larger mining operation, more equipment, and hosting capacity to the combined entity. The new entity will be listed under the ticker ABTC on Nasdaq, leveraging Gryphon's existing Nasdaq listing. The merger will result in a new structure with Class A, B, and C common stock, with Class B shares having 10,000 votes per share. This structure suggests that ABTC shareholders, who will own 98% of the combined company, will have significant control.

From a valuation perspective, Gryphon currently trades at a $102.7 million market cap. However, post-merger, Gryphon shares will represent only 2% of the combined entity. This implies a $5.1 billion market cap for the merged company. The combined entity will have $1.2 million in liquid resources and a book value of $230.0 million, with a pro-forma P/B ratio of 22.2. The combined entity's Q1 2025 revenues were $13.9 million, with a net loss of $32.6 million. This indicates a somewhat concerning picture, with a high P/S ratio of 91.7 compared to the sector median of 3.4.

The merger is expected to provide substantial synergies and economies of scale, potentially justifying the premium embedded in the combined entity's valuation. However, the market remains optimistic, with Gryphon shares bouncing to $1.28 from their 52-week low of $0.13. Investors seem to be pricing in the operational scale and robust balance sheet of ABTC.

In conclusion, Gryphon Digital Mining's reverse takeover by American Bitcoin Corp. is a strategic move aimed at bolstering its financial position and operational resources. While the combined entity faces significant challenges, the merger holds the potential for substantial synergies and growth. Investors should closely monitor the post-merger developments to assess the long-term prospects of the new entity.

References:
[1] https://seekingalpha.com/article/4818014-gryphon-digital-mining-hold-on-american-bitcoins-reverse-takeover
[2] https://coincentral.com/gryphon-digital-mining-merges-with-trump-family-linked-american-bitcoin/