Bitcoin Mining Difficulty Slumped Last Week in Biggest Decline Since Crypto Winter: Bernstein

The broker pointed out that as bitcoin prices declined and mining expenses nearly doubled post-halving, high-priced mining equipment became uneconomical to operate, leading to a decrease in overall mining power or hashrate.

Analysts Gautam Chhugani and Mahika Sapra noted that following a decrease in hashrate, the market shares of the three covered Bitcoin miners have risen by approximately 20 basis points post-halving. They further anticipate these top three publicly traded Bitcoin mining companies to continue expanding their market presence through both organic growth and mergers and acquisitions.

As a blockchain analyst, I would describe hashrate as the collective processing power harnessed for mining new blocks and validating transactions on a proof-of-work system.

As a researcher, I’ve discovered that Riot Platforms (RIOT) and CleanSpark (CLSK) stand out among leading Bitcoin miners due to their low production costs and robust financial health. Their well-structured balance sheets and substantial cash reserves are key factors contributing to their competitive edge in the industry.

The authors noted that a brief drop in Bitcoin’s price brings benefits for current, more affordable Bitcoin miners. During such times, mining hashrates stay stable, allowing larger-scale miners to carry out their expansive capital expenditures and mergers and acquisitions strategies to boost market presence.

Lastly, when the price of bitcoin gains momentum, miners are able to earn substantial revenues with each production cycle. (Or) In the concluding part of the report, it was mentioned that as the price of bitcoin rises, so too do the earnings for miners with every batch of production.

As a crypto investor, I’ve been closely monitoring the bitcoin price movements and following the insights of my trusted broker. They don’t foresee a significant downturn in Bitcoin’s value. Instead, they believe the cryptocurrency will continue to trade within a range. The real game-changer for Bitcoin, according to my broker, is the anticipated entry of registered investment advisors (RIAs), wealth platforms, and other institutional funds into the market via spot exchange-traded funds (ETFs). Once these allocations start pouring in, we could potentially see Bitcoin breaking out to new highs.

As a research analyst, I’ve assigned an “outperform” designation to CleanSpark and Riot Platforms based on my current assessment of their potential to exceed market benchmarks. On the other hand, I’ve given Marathon Digital a “market-perform” rating, indicating that I believe the stock will perform in line with the broader market average.