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U.S.-Listed Bitcoin Miners Have the Upper Hand Over Unlisted Peers: Bernstein

Aug 19, 2024
  • Miners listed in the U.S. have an advantage over private peers as they can raise capital easily, the broker said.
  • Bernstein said it sees the large publicly traded U.S. bitcoin miners as consolidators in the sector.
  • Leading miners should focus on growing market share and increasing their hashrates, the report said.
As a seasoned research analyst with over two decades of experience in the financial markets, I have witnessed numerous industry shifts and consolidations. The recent trend in Bitcoin mining is no exception. Having closely followed the evolution of this nascent yet promising sector, I am convinced that U.S.-listed Bitcoin miners hold a significant advantage over their private peers.Miners of Bitcoin (BTC), who are based in the U.S. and publicly listed, enjoy a significant edge over their non-listed counterparts due to their simpler access to funding, providing them with a broader range of financial possibilities than privately owned firms or those trading elsewhere, as suggested by broker Bernstein in a research report on Monday.

Analysts, led by Gautam Chhugani, point out that the ability to secure funds from the world’s most profound financial markets, which is typically more accessible to U.S. miners, offers a significant edge over non-U.S. mining companies, especially in an industry known for its high capital requirements and on the verge of market mergers.

Last week’s fundraising events underscored the strategic intent of several companies within the crypto sector. Marathon Digital, for instance, disclosed plans to raise funds through a private placement of convertibles for purchasing bitcoin as part of their treasury reserves. Similarly, Riot Platforms unveiled an equity offering worth $750 million. Additionally, Core Scientific and Bitdeer declared their intentions to issue convertible debt as well.

Bernstein said this supports its long bias towards publicly listed U.S. bitcoin miners being consolidators in the sector.

The broker pointed out a division within the mining sector, with some firms concentrating on bitcoin mining while others are shifting towards AI data centers. Both options appear promising, according to the report, and there’s a recurring trend: consolidation since size plays a significant role.
In my analysis, I find that Bitcoin mining operations and Artificial Intelligence (AI) data centers, although they share similar power requirements and high-density power specifications, operate in entirely distinct business spheres.

According to Bernstein, it’s crucial for top bitcoin miners to keep their attention fixed on expanding their market share within the bitcoin mining sector, as well as increasing their hashrates. Furthermore, he advises them against offloading the cryptocurrency they’ve mined at a financial loss.

According to Bernstein, they maintain that Bitcoin could reach record levels of approximately $200,000 by 2025, largely due to growing acceptance among institutions and the widespread use of Bitcoin Exchange-Traded Funds (ETFs), as per the report’s findings.

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2024-08-20 13:37