Bitcoin Mining Stocks Soar Amid Takeover Frenzy

The stocks are undervalued, so miners with attractive power contracts could become M&A targets, according to Wall Street analysts.

AccessTimeIconJun 6, 2024 at 7:54 p.m. UTC
Updated Jun 6, 2024 at 7:57 p.m. UTC

Bitcoin mining stocks outperformed other cryptocurrency-linked stocks Thursday after multiple industry takeover offers drew market attention to the question of who could be the next target.

Shares of miners such as Stronghold (SDIG), Core Scientific and TeraWulf (WULF) surged more than 15%. Gains in Iris Energy (IREN), Mawson (MIGI), Cathedra (CBIT) and Argo Blockchain exceeded 10%.

  • Candy Digital Co-Founder on Building the Rails for Future Digital Engagement
    00:58
    Candy Digital Co-Founder on Building the Rails for Future Digital Engagement
  • U.S. House Fails to Overturn Biden’s Veto; Staked Ether Close to All-Time High
    02:00
    U.S. House Fails to Overturn Biden’s Veto; Staked Ether Close to All-Time High
  • U.S. Spot Bitcoin ETF Flows Drop in Q2: Kaiko
    00:47
    U.S. Spot Bitcoin ETF Flows Drop in Q2: Kaiko
  • What's the Biggest Problem With Play-to-Earn Model?
    00:47
    What's the Biggest Problem With Play-to-Earn Model?
  • Most recently, one of the largest miners, Riot Platforms (RIOT), started a hostile takeover attempt of peer Bitfarms (BITF), while artificial intelligence firm CoreWeave proposed buying another mega-cap miner, CoreScientific (CORZ).

    Although Bitfarms and CoreScientific both rejected the offers, the takeover attempts have reminded investors that the industry may be primed for mergers.

    B. Riley analyst Lucas Pipes said that power contracts and lower valuations could be the catalyst that starts the consolidation phase for miners.

    "We believe that the bullish outlook on the power market could catalyze increased M&A activity this year, especially as wide discrepancies in valuation remain," he wrote in a report.

    JPMorgan analysts agreed with Pipes' sentiment, noting that AI and cloud computing firms seeking to diversify their power sources could come after bitcoin miners. The bank also said that as some miners are looking to exit this market following the Bitcoin halving – an event that cut mining rewards, pressuring weaker firms – M&A activity is likely to accelerate.

    Both Wall Street firms said larger miners such as Riot and Marathon Digital (MARA) are likely in the best position to lead this consolidation wave.

    Edited by Nick Baker.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Aoyon Ashraf

    Aoyon Ashraf is managing editor with more than a decade of experience in covering equity markets