Investing.com – As the halving approaches in just five days, a new report from Bernstein sheds light on the sentiments and strategies of top Bitcoin mining CEOs.
Despite a recent 15% drop in Bitcoin prices caused by geopolitical tensions, the industry remains optimistic about the upcoming halving event, which will halve the block reward for miners.
According to the report, Bitcoin's price drop over the weekend sparked a recovery to $65,000, and analysts consider these levels attractive for investors waiting for entry points, assuming geopolitical stability.
clean spark (NASDAQ:) CEO revealed that they acquired three sites in Mississippi for approximately $20 million, while Marathon Digital Holdings Inc (NASDAQ:) secured sites equivalent to 590 MW at a cost of around $265 million. Both companies have active acquisition strategies, and MARA is moving from an asset-light model to a self-mining approach to improve operational efficiency and profitability.
The CEO of Riot Platforms (NASDAQ 🙂 said the company is focusing on organic expansion, with plans to execute a 1 GW acquisition site in Corsicana, bringing its capacity to target levels by 2024 and 2025. Meanwhile, the CLSK CEO plans to address a 5 EH/s capacity gap by actively seeking new acquisitions.
The industry anticipates doubling capacity by the end of 2024 to mitigate the impact of the BTC rewards halving. Pre-contracted mining equipment at attractive prices and strong negotiating positions with manufacturers support RIOT and CLSK's expansion efforts, CEOs reveal.
A big change in the Bitcoin network lately has been the emergence of all the new Layer 2 applications and solutions online, which has driven up network fees. CEOs in the Bitcoin mining world see this as a stable source of income after the halving, helping to smooth out the market's ups and downs.
Financially, major mining companies are doing well because they keep their debt low and avoid over-leveraging their equipment. Additionally, increased activity on the blockchain is introducing additional revenue avenues for miners, helping to offset the decline in block rewards following the halving.
However, Bitcoin mining stocks have not fared as well, underperforming Bitcoin itself. Over the past month, mining stocks have fallen between 15% and 22%, with analysts attributing this to the diversion of retail liquidity from mining stocks toward Bitcoin and ETFs.
The report also highlights a consolidation in the mining industry following the halving, as larger miners with strong balance sheets and low debt levels may look to acquire smaller players struggling to adapt to the new economic realities of rewards in reduced block.
Key players like RIOT and CLSK stand out for their proactive strategies, focusing on acquisitions and capacity expansion to mitigate the impact of the halving. Bernstein notes that these companies are well positioned to take advantage of technological advances, including the integration of artificial intelligence, to improve their operational efficiency.
Despite the challenges posed by the halving, the report highlights that leading miners are well prepared to handle these changes. They have diversified revenue streams and are strategically positioned to take advantage of industry consolidation that may follow the halving event.
Meanwhile, Bitcoin miners are increasing their computing power to record levels as they prepare for the code tweak that will seriously reduce their profits.
The measure of computing power needed to mint new tokens, known as mining difficulty, hit a record high on Wednesday. This latest biweekly update is the last one before the “halving” event, scheduled for around April 20. Since the last halving in 2020, this difficulty metric has increased by almost 600%, while the rate of energy consumption by miners has also increased. experienced a sharp increase during this period.
