According to a report by CoinDesk, brokerage firm Bernstein stated in a research report on Monday (15th) that the performance of Bitcoin mining companies this year may not be as strong as cryptocurrencies, but with the halving of rewards approaching, the CEOs of these mining enterprises remain optimistic, citing stronger balance sheets.
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 taken away “retail liquidity” from mining stocks, as well as concerns about the halving affecting 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 are relatively well-positioned financially in this cycle, thus better able to withstand the impact of the halving. The CEOs pointed out that “miners’ dollar income is at historical highs, providing a solid buffer for miners before the halving” and “relatively low debt on the balance sheet.”
Industry consolidation
Some CEOs also emphasized the possibility of mining consolidation, as stated in Bernstein’s report:
The report notes another notable change is the applications and Layer 2 developments on the Bitcoin blockchain, which increase network fees, serving as incremental income flow to miners. The report also adds that Riot and CleanSpark are expected to double their capacity by the end of the year, offsetting any effects from the halving.
Related reports: “Miners’ Bitcoin inventory drops to the lowest level since early 2021, what is the intention for 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”