Investing.com — While 2024 was less than two weeks ago, the 20% drop in the price of the original cryptocurrency since the conference in Nashville makes it seem like a distant memory.
BTIG said in a research report on Tuesday that the biggest advantage of Bitcoin 2024 was the continued expansion of the ecosystem and the growing demand for electricity to support it. They noted that competition for energy is expected to increase in the coming years.
Mergers and acquisitions were also a major theme in Bitcoin 2024, particularly among miners. BTIG analysts noted that, following the halving, some Bitcoin mining operations lack the capacity and capital to scale their businesses.
The recent drop in Bitcoin prices around $50,000 has made mining with older models, such as the S19 J Pro+, a tricky route to take. BTIG said: “We believe that a prolonged Bitcoin price range around $50,000 could force some smaller miners to look to merge with larger, more established miners.”
Currently, the Bitcoin price is hovering around $53,000, which translates to a spread of $0.03-$0.04/kWh for newer mining rigs, assuming an energy price of $0.05/kWh. The report further details that the monthly average global hash rate in August to date is around 662 EH, up 8% from the previous month and 50% higher than in October 2023. This points to increasingly challenging mining economics for older models, where Bitcoin price revenue on a $/kWh basis roughly equates to an energy price of $0.05/kWh.
Meanwhile, Riot Platforms (NASDAQ:) acquired Block Mining for approximately $125 million, giving the cryptocurrency miner immediate access to 60 MW of capacity across two sites in Kentucky, which is expected to scale to 110 MW by the end of the year and 305 MW by the end of 2025.
BTIG commented: “This acquisition diversifies RIOT’s operations outside of Texas and paves the way for RIOT to have 2GW of capacity, with 1.7GW in Texas and 0.3GW in Kentucky.” They added: “We expect larger miners with access to capital to continue to consolidate the Bitcoin mining market in the US.”
Cleanspark (NASDAQ:) also acquired GRIID, expanding its presence in Tennessee. BTIG noted: “The consolidation phase is driven by the need for scale and efficiency in an increasingly competitive landscape.”
Separately, the Energy Information Administration (EIA) announced a planned second attempt to survey the Bitcoin mining industry on its energy usage, following an initial attempt in February. The preliminary analysis noted that cryptocurrency mining consumes between 0.6% and 2.3% of total U.S. electricity. BTIG noted: “The announcement comes amid Dominion Energy’s (NYSE:) statement that it may need to build as many as eight peaking power plants over the next 10 to 15 years to meet rising energy demand from data centers.”
BTIG updated its forecasts for Riot Platforms and Marathon Digital (NASDAQ:) following their second quarter 2024 earnings. For 2024 and 2025, BTIG’s revenue targets for RIOT are approximately $368 million and $617 million, respectively, and for MARA, $613 million and $744 million. BTIG’s Bitcoin price estimates for 2024 and 2025 are $62,000 and $72,000 on average, respectively.
“We assume a continued upward trajectory in Bitcoin prices, which will boost miner margins,” BTIG analysts said.
