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According to a new study report by brokerage company Bernstein, CEOs are hopeful despite the obstacles faced by miners due to significant market movements as the Bitcoin halving event draws near.
This year has been difficult for bitcoin miners because of the focus on spot Bitcoin and exchange-traded funds (ETFs), which has caused “retail liquidity” to be drained from mining stocks, according to analysts Gautam Chhugani and Mahika Sapra. This underperformance has also been attributed to worries about how the upcoming halving will affect miner revenues.
Despite these challenges, Bernstein’s interviews with CEOs from Riot Platforms, CleanSpark, Marathon Digital, Cipher Mining, and Hut 8 reveal a sense of confidence. These companies, positioned relatively well financially, are better equipped to weather the halving’s effects.
According to the report, CEOs highlight the resilience of miner dollar revenues, which are currently at all-time highs, providing a strong buffer pre-halving. Additionally, the CEOs emphasize the low debt levels on their balance sheets, further strengthening their position.
CEOs anticipate possible industry consolidation in the mining sector. For example, the CEO of CleanSpark anticipates a move towards four dominant miners: RIOT, MARA, CLSK, and CIFR. The CEO of MARA believes that consolidation is inevitable and names CLSK as the main rival in acquisition efforts.
The blockchain technology behind Bitcoin has advanced significantly during the current halving cycle as well. The expansion of layer 2 and applications has raised network fees, giving miners new sources of income.
Riot and CleanSpark expect to double their capacity by year-end, reducing any repercussions despite the constraints presented by the reduction. This growth demonstrates the industry’s adaptability and resiliency in the face of market swings.