Bitcoin (BTC) miners may have seen underperformance compared to the cryptocurrency this year, but CEOs in the mining industry remain optimistic as the reward halving approaches, according to a research report by broker Bernstein released on Monday.
Despite the miners’ shares lagging behind due to strong moves in spot bitcoin and exchange-traded funds (ETFs), which have diverted “retail liquidity” from mining stocks, and concerns about the impact of the upcoming halving on miner revenues, CEOs remain positive about the future, analysts Gautam Chhugani and Mahika Sapra wrote.
The quadrennial halving, scheduled around April 19-20, reduces miner rewards and slows the rate of growth in bitcoin supply. In interviews conducted by the broker, CEOs of major mining companies including Riot Platforms (RIOT), CleanSpark (CLSK), Marathon Digital (MARA), Cipher Mining (CIFR), and Hut 8 (HUT) expressed confidence in their financial positions, citing all-time high dollar revenues and relatively low debt on balance sheets, providing a solid cushion pre-halving.
Moreover, CEOs highlighted the potential for miner consolidation in the industry. CleanSpark’s CEO expects consolidation to four leading miners, naming RIOT, MARA, CLSK, and CIFR as frontrunners. MARA’s CEO also mentioned a pathway to industry consolidation, identifying CLSK as a key competitor in the acquisition race.
Additionally, the report noted significant developments in application and layer 2 development on the Bitcoin blockchain, leading to increased network fees that contribute additional revenue streams for miners.
Looking ahead, Riot and CleanSpark anticipate doubling their capacity by the end of the year, mitigating any potential impact of the halving.
The upcoming halving, while presenting challenges, is viewed by industry leaders as an opportunity for growth and consolidation, setting the stage for a dynamic future in the Bitcoin mining sector.
