Bitcoin Miner CEOs Are Upbeat Ahead of the Halving, Expect M&A: Bernstein

Miners' shares have lagged as bitcoin outperformance has sucked retail liquidity from mining stocks, the report said.

AccessTimeIconApr 16, 2024 at 7:39 a.m. UTC
Updated Apr 16, 2024 at 7:42 a.m. UTC
  • Mining stocks have underperformed bitcoin this year.
  • The CEOs of these companies remain upbeat ahead of the halving citing stronger balance sheets, the report said.
  • Some CEOs noted the potential for consolidation in the sector, Bernstein said.

Bitcoin (BTC) miners may have underperformed the cryptocurrency this year, but their CEOs remain upbeat as the reward halving approaches, broker Bernstein said in a research report on Monday.

The underperformance has been caused by strong moves in spot bitcoin and exchange-traded funds (ETFs), which have sucked "retail liquidity" from mining stocks, and by concerns about the impact of the halving on miner revenues, analysts Gautam Chhugani and Mahika Sapra wrote.

The quadrennial halving is when miner rewards are reduced, slowing the rate of growth in bitcoin supply. The next halving is due around April 19-20.

The broker interviewed the CEOs of Riot Platforms (RIOT), CleanSpark (CLSK), Marathon Digital (MARA), Cipher Mining (CIFR) and Hut 8 (HUT). The companies are in a relatively comfortable financial position this cycle and so are better prepared to withstand the impact of the halving, Bernstein said.

The "CEOs point to miner dollar revenues at all-time highs, providing a solid cushion to miners pre-halving," and they also noted the "relatively low debt on the balance sheet."

Some of the CEOs highlighted the potential for miner consolidation, the report said.

"The CEO of CleanSpark expects the industry to consolidate to 4 leading miners and believes RIOT, MARA, CLSK and CIFR to be in the lead," the note said, adding that the "CEO of MARA also highlighted a path to industry consolidation and named CLSK as their arch competitor in the race for acquisition targets."

Another notable change this time round has been application and layer 2 development on the Bitcoin blockchain, which has led to an increase in network fees that flow back to miners as incremental revenue streams, the report noted.

Riot and CleanSpark expect to have doubled capacity by the end of the year, which will offset any impact of the halving, the report added.

Edited by Sheldon Reback.


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; 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.

Author placeholder image

Will Canny is CoinDesk's finance reporter.

Read more about