Why Bitfarms Stock Was Going Nuts Monday

Explore Bitfarms, the top traded stock on the TSX, with significant trading volume and a rising share price linked to Bitcoin.

Monday was a bull ride for Bitfarms (TSXV:BITF). It was the most actively traded stock on the TSX with 10.4 million shares exchanging hands. That is almost double its average trading volume of 5.4 million. Most of the trading volume was skewed towards the buy momentum, which drove the share price up 14%.

Bitcoin

Image source: Getty Images

Bitfarms bull momentum  

Bitfarms’ stock price has been reacting to Bitcoin prices since September 28: Bitcoin’s price rose 14.5% while Bitfarms’ share price surged 34% between September 28 and October 6. The stock is sensitive to Bitcoin prices as the company receives most of its revenue from Bitcoin mining.

Bitfarms operates 14 Bitcoin data centres in Canada, the United States, and Paraguay, and earns in BTC for providing hashing power and high-performance computing (HPC)/artificial intelligence (AI) compute capacity.  

What happened on Monday?

OpenAI signed an agreement to deploy 6 gigawatts of AMD graphics processing units (GPUs) for AI infrastructure, with 1 gigawatt deployment expected to be completed in 2026. Now, Bitfarms has no direct correlation with AMD or OpenAI. However, the OpenAI-AMD deal created bull momentum in the HPC/AI infrastructure space. This bull momentum, coupled with the BTC price rally, made traders go nuts for Bitfarms stock.   

The Motley Fool recommends Advanced Micro Devices. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

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