Several Bitcoin mining companies have filed for bankruptcy in the cryptocurrency winter of 2022, but Asher Genoot, CEO of publicly traded mining company Hut 8, firmly believes that the situation will be different after the upcoming Bitcoin halving.
During an interview with Bloomberg on Wednesday, Genoot stated that the main reasons for the bankruptcy of mining companies in 2022 were excessive leverage and unpreparedness for rising energy costs.
Several Bitcoin mining companies, including Compute North, Celsius Mining, and Core Scientific, filed for bankruptcy in the cryptocurrency winter of 2022. However, Genoot stated that Bitcoin mining companies have generally relied less on leverage since then and have relied more on debt-free capital from the stock market to develop their business.
Genoot expects to see an increase in mergers and acquisitions among smaller Bitcoin mining companies, which he believes will significantly reduce the bankruptcy rate. He explained that Bitcoin may need to drop to $30,000 or $40,000 before a significant amount of M&A activity or “distressed opportunities” emerge.
Genoot also stated that after the Bitcoin halving, investors will flock to “large-scale operators with the lowest marginal production costs.” According to CoinMarketCap data, at the time of this article’s publication, there are only 17 days left until the Bitcoin mining reward halving.
Source
Related reports:
– “Bitcoin miners’ income reaches $2 billion in March, hitting a historical high”
– “Bitcoin halving leads to a large number of old mining machines leaving the United States, mainly moving to Africa and South America”
– “Cantor Fitzgerald report: 11 publicly traded mining companies may struggle to profit from mining business after Bitcoin halving”
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