Summary GRYP earns Bitcoin via FPPS mining pools, which gives it relatively steady payouts that include transaction fees. GRYP shareholders recently approved a reverse takeover by American Bitcoin Corp. Its stake will now be around 2% post-close, with a ticker change to “ABTC” pending. American Bitcoin is majority owned by Hut 8 Corp. There’s a disclosed market stand-off period that applies per the merger’s S-4 filing. Still, GRYP’s Q2 2025 showed tight liquidity and declining revenue. The combined entity also appears to be somewhat constrained. Ultimately, I think the implied valuation for the combined entity seems expensive. So I lean towards a neutral “Hold” rating at these levels. Gryphon Digital Mining, Inc. ( GRYP ) is a pure-play cryptocurrency mining company focused on Bitcoin (BTC-USD). GRYP generates revenue by directing the hashrate of its ASIC mining machines to pools such as Foundry USA under the Full Pay Per Share (FPPS) model. This gives GRYP relatively stable payouts and includes transaction fees. Their recent webcast confirmed that GRYP’s shareholders approved the reverse takeover by American Bitcoin Corp. (ABTC), which adds mining infrastructure and gives it extra financial stability as a combined entity. Yet, at this point, it seems there's a substantial premium embedded for the combined entity. Thus, I feel it’s prudent to rate GRYP a “Hold” for now. Bitcoin Hashrate Play Gryphon Digital Mining is a cryptocurrency mining company that mostly focuses on Bitcoin using its ASIC machines. Basically, GRYP contributes computing power (i.e., hashrate) to mining pools in exchange for Bitcoin rewards. GRYP went public back in February 2024 following a reverse merger with Akerna Corp. , which, interestingly, was specialized in SaaS cannabis compliance. Today, GRYP is headquartered in Las Vegas, Nevada. Source: Foundry Digital Website. Retrieved August 24, 2025. With that in mind, the bottom line is that GRYP’s revenues come from providing hashrate to mining pools. Mining pools are essentially miner cooperatives. Each miner points their machines’ computational power to the pool’s server, and whenever the pool collectively wins a block, its rewards are split among participants. Each miner receives its rewards proportionally based on the amount of hashrate it contributed to win that particular block. Moreover, GRYP’s main pool partner is Foundry USA, which is a large Bitcoin mining pool where GRYP earns part of the rewards under a Full Pay Per Share (FPPS) model. To give you an idea, FPPS means miners receive a fixed payout for each valid share of work they submit, regardless of whether the pool actually wins a Bitcoin block. Also, FPPS includes transaction fees from blocks, which makes it more profitable than regular PPS models. After all, this means miners also share in both Bitcoin revenue sources. Bitcoin Mining Reverse Takeover Currently, GRYP is finalizing a merger with American Bitcoin Corp. (ABTC) to expand its mining capacity. A special shareholder meeting took place on August 27, 2025, and the reverse takeover was approved (the votes were counted at 12:35 in the recording). As such, it’s expected that the new entity will be called American Bitcoin Corp. and trade under the new ticker “ABTC.” Effectively, current GRYP shareholders will be heavily diluted, but will get a little equity in a much larger mining operation. GRYP’s shares remain for now until the Nasdaq approves the branding and ticker update. Source: CryptoSlate. Moreover, it’s worth mentioning that ABTC was actually co-founded and backed by Eric Trump. He holds a minority stake, with the majority held by Hut 8, an energy and infrastructure firm. Technically, Hut 8 Corp. wholly owns American Bitcoin Holdings (ABH) LLC., which itself owns 80% of American Bitcoin today. Eric Trump is listed as owning 9.3% of American Bitcoin in the merger's S-4 filing . Donald Trump Jr. has also been reported as owning a portion of American Bitcoin, but if he owns less than 5% he wouldn't show up in this disclosure, so I can't confirm his stake. Source: Reverse Takeover S-4 Filing. March 2025. Fortunately, we do know there’s a lock-up period for their shares (see the S-4’s Market Stand-off Agreement ). Basically, this will be the earlier of a) 1 year after the closing date of the deal, or b) 18 months after March 31, 2025. Nonetheless, the publicly traded GRYP shares today will correspond to just 2% of the combined entity. In my view, that is a relatively thin float if Hut 8 or Eric Trump decides to sell a portion of their stakes. So, it’s worth monitoring this as a potential risk post-merger. In any event, ABTC today generates its revenues by mining Bitcoin through its fleet of ASIC miners, similar to GRYP. In fact, ABTC is also technically a pure-play Bitcoin miner with a comparable model to GRYP that focuses on hashrate to mining pools in exchange for Bitcoin. So, the strategic rationale here is simple. ABTC will bring larger operational resources , additional miners, hosting infrastructure, plus get a publicly traded ticker in the process. Source: Hut8 American Bitcoin Launch Presentation. Retrieved August 24, 2025. But at a deeper level, this combined entity could be much better capitalized, which could pave the way for building a more competitive mining platform. This merger with ABTC was proposed back in May 2025 , and upon completion, GRYP shareholders will hold 2% and ABTC shareholders will own 98% of the combined company. The merged company will have a new structure that will include Class A, B, and C common stock. Class B shares will have 10,000 votes per share, so it’s possible the voting power may be concentrated in that share class as well. Regardless, ABTC shareholders will effectively control the resulting company. Valuation And Risk Analysis As for GRYP’s perspective, this reverse takeover is largely due to its rapidly dwindling resources to fund its operations. Their Q2 2025 balance sheet showed only $678.0 thousand in cash, $72.0 thousand in marketable securities, and a stockholders’ deficit of $11.0 million. Also, its revenues declined YoY to $1.4 million from $5.5 million in Q2 2024. So clearly, GRYP needed a partner to shore up its balance sheet with a much-needed capital infusion. American Bitcoin also brings a larger mining operation, more equipment, and hosting capacity. And the added benefit of the transaction is that it leverages GRYP’s Nasdaq listing, so an outright IPO isn’t necessary for American Bitcoin. Source: Seeking Alpha Charts. Nevertheless, the market so far seems optimistic about this merger with ABTC. GRYP’s shares have bounced to $1.28 from their 52-week low of just $0.13 per share. Despite the heavy dilution for GRYP’s current shareholders, investors are seemingly pricing in ABTC’s operational scale and robust balance sheet. Indeed, this could be a catalyst for a financially stronger entity with better competitive prospects through additional CAPEX down the road. Plus, the combined entity will still retain its access to capital markets, which is a nice added bonus to this transaction. Now, from a valuation perspective, GRYP currently trades at a $102.7 million market cap. However, in reality, we should now think of GRYP as 2% of the merged entity post-transaction. So, a back-of-the-envelope approximation implies a $5.1 billion market cap for the post-merger company. The pro-forma consolidated statements (March 2025) show the combined entity will have $318.0 thousand in cash, $49.0 thousand in marketable securities, and $787.0 thousand in digital assets. Therefore, that amounts to approximately $1.2 million in liquid resources, against no financial debt (total liabilities of $11.2 million). Source: Reverse Takeover S-4 Filing. March 2025. Additionally, the combined book value would have been $230.0 million ( S-4 filing , page 150), indicating a P/B of 22.2 (assuming the implied market cap of $5.1 billion I previously mentioned). Note that per the merger's S-4 filing, GRYP had a stockholders' deficit of $7.7 million by Q1 2025 (by Q2, its book value declined further to $11.0 million ). So, ABTC's book value of $115.8 million partly offsets GRYP's negative book value. The remaining portion of the reported combined Q1 book value of $230.0 million comes from pro-forma adjustments. Primarily from adding $114.3 million in goodwill and $121.1 million in net PPE from ABTC's books. Similarly, the combined entity would have had Q1 2025 revenues of only $13.9 million and a net loss of $32.6 million. If we annualize its topline, it amounts to just $55.6 million, which implies an expensive P/S of 91.7. For context, GRYP’s sector’s median P/B and P/S are around 3.6 and 3.4, respectively. Source: Reverse Takeover S-4 Filing. March 2025. Lastly, if we use the combined EBIT as a proxy for cash flow, it also shows a somewhat concerning picture. The combined entity would have had a Q1 2025 EBIT loss of $46.5 million, or around $186.0 million if we annualize it. And remember, the combined liquid resources are only $1.2 million (including digital assets like Bitcoin). So, I imagine they’re probably going to do a capital raise post-transaction or issue some debt to increase their operating liquidity. But at the end of the day, I believe the GRYP stock appears too expensive to warrant a bullish rating at this point. Conclusion: Neutral For Now Overall, I think GRYP’s shareholders have clearly benefited from this transaction, as the shares have rapidly appreciated since the reverse merger was announced. However, the combined entity still has many uncertainties, and it does seem to trade at a substantial premium at this point. Naturally, consolidation is critical in Bitcoin mining, as economies of scale lower per-bitcoin production costs. It’s possible there will be considerable synergies post-transaction that justify such a premium. But for now, I feel it’s prudent to remain neutral on the stock until we have more details post-transaction.