According to a research report by brokerage firm Bernstein, Bitcoin (BTC) miners have experienced underperformance this year. However, the CEOs of mining companies remain optimistic as the upcoming halving event approaches. The halving, which occurs every four years, involves a reduction in miner rewards, consequently slowing the rate of Bitcoin supply growth. The next halving is anticipated to take place around April 19-20.
The report explained that the underperformance can be attributed to significant movements in Bitcoin and spot exchange-traded funds (ETFs). These factors have drained “retail liquidity” from mining stocks, coupled with concerns about the impact of the halving on miner revenues. However, in interviews with the CEOs of Riot Platforms (RIOT), CleanSpark (CLSK), Marathon Digital (MARA), Cipher Mining (CIFR), and Hut 8 (HUT), these companies emphasized that they are in a relatively strong financial position this cycle, making them better equipped to withstand the effects of the halving.
The CEOs also highlighted that miner dollar revenues have reached all-time highs, providing a solid buffer for miners ahead of the halving. Additionally, they noted the relatively low debt levels on their balance sheets. The report also mentioned that some CEOs foresee potential consolidation within the mining industry. The CEO of CleanSpark, for example, expects the industry to consolidate around four leading miners, naming RIOT, MARA, CLSK, and CIFR as the frontrunners. The CEO of MARA emphasized a similar path to industry consolidation and identified CLSK as their main competitor in the race to acquire targets.
Another significant change observed this time around is the development of applications and layer 2 solutions on the Bitcoin blockchain. This development has led to an increase in network fees that flow back to miners as additional revenue streams.