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Last week, Bitcoin mining difficulty plummeted in the biggest decline since cryptocurrency winter: Bernstein
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Bitcoin mining difficulty decreased by about 6% last week, the report said.
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The broker noted that bitcoin miners with the lowest costs increased market share after the halving.
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Bernstein said a pause in the bitcoin rally is positive for low-cost miners as hashrates remain capped.
Bitcoin mining difficulty {{BTC}} fell about 6% last week, marking the most significant drop since the cryptocurrency winter of December 2022, and that’s a positive development for some miners, the broker Bernstein in a research report.
The broker noted that with lower bitcoin prices and costs nearly doubling since then halvingHigher-cost mining facilities were shut down, resulting in a drop in hashrate.
“As the hashrate fell, the market share of our 3 covered miners increased after halving by nearly 20 basis points (bps),” analysts Gautam Chhugani and Mahika Sapra wrote, adding that “we expect the top 3 listed bitcoin miners continue to consolidate market share through organic and M&A-led expansion.”
Hashrate refers to the total combined computational power used to extract and process transactions on a work test blockchain.
The top bitcoin miners, Riot Platforms (RIOT) and CleanSpark (CLSK), have the lowest production costs with strong balance sheets and liquidity positions, the report said.
“A temporary pause in bitcoin price is actually positive for current low-cost bitcoin miners, as hashrates remain capped and strong miners can execute their aggressive capex and M&A plans to increase market share,” the authors wrote.
“And finally, when bitcoin price momentum resumes, miners can earn high dollar revenues relative to increased production,” the report adds.
The broker does not expect a sharp decline in bitcoin’s price, expecting the cryptocurrency to remain range-bound and break higher once spot exchange-traded funds (ETFs) see allocations from registered investment advisors ( RIA) and asset platforms. and other institutional funds.
Bernstein has an Outperform Rating on CleanSpark and Riot Platforms and a Market Outperform Rating on Marathon Digital (MARA).
To know more: Bitcoin Miners Collected Abnormal Transaction Fees After Halving: Bernstein