Bernstein: Mining Companies Optimistic about Post-Halving Prospects, Anticipate Mergers and Acquisitions

Bernstein: Mining Companies Optimistic about Post-Halving Prospects, Anticipate Mergers and Acquisitions

Bernstein: Mining Companies Optimistic about Post-Halving Prospects, Anticipate Mergers and Acquisitions

According to a report by CoinDesk, brokerage firm Bernstein stated in a research report on Monday (15th) that Bitcoin mining companies may not perform as well as cryptocurrencies this year, but the CEOs of these mining enterprises remain optimistic as the balance sheets are stronger with the approaching halving of rewards.

Analysts Gautam Chhugani and Mahika Sapra wrote that the underperformance of mining stocks is due to the strong performance of Bitcoin spot and ETF, which have absorbed “retail liquidity” from mining stocks, as well as concerns about the impact of halving on miners’ income.

Bernstein interviewed CEOs of Riot Platforms (RIOT), CleanSpark (CLSK), Marathon Digital (MARA), Cipher Mining (CIFR), and Hut 8 (HUT), and stated that these companies have relatively ample financial conditions in this cycle, thus better able to withstand the impact of halving. The CEOs pointed out that “miners’ dollar income is at a historical high, providing a solid buffer for miners before halving,” as well as “relatively low debt on the balance sheet.”

Industry Consolidation

Some CEOs also emphasized the possibility of mining consolidation. According to Bernstein’s report:

The report pointed out that another notable change is the applications and Layer 2 development on the Bitcoin blockchain, which increase network costs, and these costs flow to miners as incremental revenue. The report also added that Riot and CleanSpark are expected to double their capacity by the end of this year, which will offset any impact from halving.

Related reports: “Miners’ Bitcoin inventory dropped to the lowest level since early 2021, what is the purpose of shipment?” “Cantor Fitzgerald report: 11 listed mining companies may struggle to profit from mining business after Bitcoin halving” “Bitcoin halving prompts a large number of old mining machines to move out of the United States, mainly to Africa and South America”