Bitcoin miners are undergoing a significant transformation as large-scale operations become more prevalent, and North America gains an edge over China. A recent research report by broker Bernstein highlights this shift and offers investment recommendations for those looking to capitalize on the evolving landscape of cryptocurrency mining.
Riot Platforms and CleanSpark: Market Share Consolidators
According to the Bernstein report, Riot Platforms and CleanSpark are two companies that stand out as market share consolidators with strong operational advantages and low production costs. These factors make them attractive investment options for individuals seeking exposure to the cryptocurrency market.
Riot and CleanSpark have both made counter-cyclical investments in bitcoin self-mining capacity. This strategic move is expected to pay off as the bitcoin price cycle progresses. By investing in their mining capabilities during periods of lower bitcoin prices, these companies position themselves to reap the benefits when prices inevitably rise again.
Marathon Digital: Largest Miner with Higher Costs
In contrast to Riot Platforms and CleanSpark, the report notes that Marathon Digital is the largest bitcoin miner but faces higher costs and reliance on hosting partners. This reliance on third-party partners may impact the company’s ability to control costs and maintain operational efficiency.
Despite its size, Marathon Digital’s higher costs and reliance on hosting partners make it a less attractive investment option compared to Riot Platforms and CleanSpark.
Bitcoin Price Cycle: High of $150,000 by Mid-2025
Bernstein’s research predicts that the next bitcoin price cycle will see the cryptocurrency reach a high of $150,000 by mid-2025. This projection underscores the potential for significant returns on investments in successful bitcoin miners.
However, it is essential to remember that investing in a bitcoin miner is a high-risk endeavor, given the volatile nature of the cryptocurrency market. Investors should carefully consider their risk tolerance and investment objectives before committing to any cryptocurrency-related investments.
Bitcoin Halving: Expected in April 2024
The next bitcoin halving event is anticipated to occur in April 2024. This event, which happens approximately every four years, reduces the number of new bitcoins generated and awarded to miners by 50%. Bitcoin halving events have historically been associated with significant price increases, as the reduced supply of new bitcoins puts upward pressure on the cryptocurrency’s value.
Investors looking to capitalize on the potential price increases associated with the upcoming halving should consider investing in bitcoin miners with strong operational advantages and low production costs, such as Riot Platforms and CleanSpark.
The Growing Dominance of North American Bitcoin Miners
The Bernstein report also highlights the increasing prominence of North American bitcoin miners in the global market. As China’s influence over the cryptocurrency mining sector wanes, companies based in North America are well-positioned to fill the void and capture a larger share of the market.
This shift presents a unique opportunity for investors to gain exposure to the growing influence of North American bitcoin miners, which are poised to become key players in the global cryptocurrency market.
Conclusion
In summary, the landscape of bitcoin mining is changing as large-scale operations become more common and North America gains ground over China. Investors looking for high-risk, high-reward opportunities in the cryptocurrency market should consider Riot Platforms and CleanSpark, which offer strong operational advantages and low production costs.
As the bitcoin price cycle continues and the next halving event approaches, these companies’ counter-cyclical investments in self-mining capacity could lead to significant returns. However, investors must carefully weigh the risks associated with investing in bitcoin miners and the volatile nature of the cryptocurrency market.
