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Riot Platforms Is Best Suited to Consolidate Bitcoin Mining Sector: Bernstein

May 28, 2024
  • Riot has the financial capacity to consolidate the bitcoin mining space, the report said.
  • The broker said it expects the U.S. bitcoin mining space to consolidate to around five large players.
  • Bernstein said the larger miners should ramp up their M&A game to maintain strategic relevance.
As a researcher with a background in the crypto and mining industries, I find Bernstein’s report on Riot Platforms (RIOT) and the consolidation of the bitcoin mining sector particularly intriguing. The company’s ambition to build the world’s largest publicly listed mining firm is noteworthy, especially considering its strong financial position with no debt and over $1.3 billion in cash and bitcoin on its balance sheet.Riot Platforms (RIOT), an influential Bitcoin (BTC) mining company, asserts its goal to unify the Bitcoin mining industry and establish the globe’s leading publicly-traded mining corporation, according to Bernstein’s recent research report.

As a researcher studying the financial landscape of Colorado-based companies, I’ve come across one noteworthy organization that boasts an impressive financial position. With no outstanding debt and over $1.3 billion in cash and bitcoin assets, this company holds significant power to shape the mining industry.

Riot intends to take over Bitfarms (BITF) by purchasing a substantial stake of 9.25%, and has proposed buying out all remaining shares at a price of $2.30 per share, as announced on Tuesday by the miner itself.

Smaller Bitcoin miners are finding it more challenging to compete in the industry due to the increasing difficulty of amassing sufficient hashing power on a global scale, according to analysts Gautam Chhugani and Mahika Sapra.

As a market analyst, I would interpret Bernstein’s prediction as follows: I believe the Bitcoin mining sector in the United States is on track to shrink, with approximately five major players emerging to dominate a significant portion of the mining capacity. Currently, there are over twenty publicly listed mining companies in existence.

If limiting factors for expanding AI computation prove to be power requirements, the authors propose that bitcoin miners’ control over power sources, land, and operational expertise in managing data centers make them valuable resources for this purpose.
Smaller Bitcoin mining companies are experiencing increased competition from AI data centers, which are actively seeking to purchase mining sites. To preserve their long-term significance, larger Bitcoin miners must accelerate their mergers and acquisitions (M&A) plans.

According to Bernstein’s analysis, Riot’s shares carry an “outperform” recommendation, with a projected price of $22. Currently, these shares are being bought and sold at approximately $10.30.

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2024-05-29 14:04