What the White House’s 401(k) Crypto Order Could Mean for Bit Digital’s Valuation in 2025
October 11, 2025
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Trying to figure out whether you should buy, hold, or maybe even part ways with Bit Digital stock? You’re not alone. Bit Digital has caught more than a few eyes recently, and if you glance at its returns, it’s not hard to see why. Over the past week alone, the stock jumped 7.4%, stacking onto an impressive 26.8% gain over the last month. Year-to-date, it’s up 20.5%, while the past year shows a tidy 19% gain. What’s really striking, though, is that three-year run-up of an astonishing 265%, which stands in sharp contrast to the five-year number, a mild -2.3%. This hints at past volatility that has settled down for some but could catch others off guard.
So, what’s been fueling these swings? In large part, it’s broader news from Washington and Wall Street. Recent developments, like the White House’s push to expand crypto access in retirement accounts and the buzz around regulatory clarity, have stoked optimism (and some fresh risks) in the crypto sector. Moves like these help explain why Bit Digital’s share price feels so lively lately. Investors are essentially recalibrating for a landscape where cryptocurrencies keep inching toward the financial mainstream.
Now, if you’re staring at value metrics, here’s a quick gut check: Bit Digital scores a 3 on its value score, meaning it ticks the “undervalued” box in 3 out of 6 key checks. That’s neither a slam dunk nor a warning siren, so context is everything. Next up, I’ll break down the different ways analysts size up valuation for a company like Bit Digital, before circling back to what I think is an even better way to understand what the current price really means.
Approach 1: Bit Digital Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow (DCF) model estimates a company’s worth by projecting its future cash flows and then discounting them back to the present day, offering an intrinsic value assessment based on expected performance. For Bit Digital, this approach uses a two-stage free cash flow to equity model that synthesizes projected annual cash flows and then factors in their risk and time value.
Currently, Bit Digital’s last twelve months of free cash flow stands at negative $85.5 Million, meaning the business is burning through cash. However, analysts forecast a sharp turnaround, with free cash flow expected to hit $109.3 Million by 2026. Even more notably, extrapolated projections shoot to $738.8 Million by 2035, built on anticipated high growth rates over the coming decade. All cash flows are reported in $ (USD).
Based on these estimates, the DCF model calculates that Bit Digital’s fair value is $27.38 per share. Given this, the stock appears to be trading at an 86.3% discount to its intrinsic value, which may indicate that it is deeply undervalued compared to its projected future cash generation.
For companies like Bit Digital, which are still ramping up profits but already generating meaningful revenue, the Price-to-Sales (P/S) ratio is often the go-to valuation metric. This multiple tells you how much investors are paying for each dollar of sales and is particularly helpful when earnings are negative or volatile, as is the case here.
Growth expectations and risks play a big role in what counts as a “normal” P/S ratio. Fast-growing firms or those in hot industries can justify higher P/S numbers, while more mature or riskier businesses tend to trade at lower multiples. For Bit Digital, the current P/S ratio is 12.28x, well above the peer average of 4.06x and also over double the industry average of 5.04x for Software companies. At first glance, this makes the stock look expensive compared to its sector.
However, the Simply Wall St “Fair Ratio” digs deeper. Unlike simple peer or industry comparisons, the Fair Ratio (here, 11.17x) calculates what P/S is justified based on Bit Digital’s specific growth prospects, unique risks, profit margins, and market cap. By synthesizing all these factors, it provides a much more tailored benchmark than crude averages. Comparing Bit Digital’s actual P/S (12.28x) to its Fair Ratio (11.17x), the valuation is a touch high but not dramatically outside the lines.
Upgrade Your Decision Making: Choose your Bit Digital Narrative
Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your personal investment story for a company like Bit Digital, including the reasons behind your forecast for its revenue, earnings, and future performance. All of these factors are combined to create your view of a fair share price.
Rather than just relying on static numbers, Narratives connect the company’s unique journey, such as its recent pivot to Ethereum staking or moves to capture institutional adoption, to how you see its financials developing over time and what you consider it’s worth today.
They are easy to use and available right now on Simply Wall St’s Community page, where millions of investors share, compare, and update their Narratives in real time.
Narratives make buy or sell decisions clearer by comparing your Fair Value estimate to the current Price, and because they update automatically when new information or earnings reports are released, your conclusions remain relevant.
For example, one investor might believe Bit Digital’s fast-growing revenue and improved profit margins will push fair value to $7.00, while another could see risks outweighing rewards and set their figure closer to $5.00.
This article by Simply Wall St is general in nature.
We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.
It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include
BTBT
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