Bitcoin 2024 Overview

While Bitcoin 2024 was less than two weeks ago, a 20% drop in the original cryptocurrency’s price since the conference in Nashville makes it feel distant.

Key Takeaways from Bitcoin 2024

• Ecosystem Expansion: BTIG’s research highlights the continued expansion of the Bitcoin ecosystem and the growing demand for electricity to support it.
• Competition for Power: Competition for power is expected to increase in the following years.
• Mergers and Acquisitions: A major theme at the conference was mergers and acquisitions, particularly among miners. Some operations lack the capacity and capital to scale post-halving.

Mining Economics Challenges

The recent price drop into the low $50,000 range poses challenges for older mining models like the S19 J Pro+. BTIG believes that sustained prices in this range could compel smaller miners to merge with larger ones.
– Current Bitcoin price is around $53,000, translating to a $0.03-$0.04/kWh spread for the latest equipment at a power price of $0.05/kWh.
– The global hash rate average is about 662 EH, an increase of 8% month-over-month and 50% from October 2023, resulting in challenging mining economics for older models.

Notable Industry Moves

Riot Platforms Acquisition

Riot Platforms (NASDAQ:RIOT) acquired Block Mining for about $125 million, gaining access to 60MW of capacity across two Kentucky sites, expected to rise to 305MW by 2025.
– This acquisition diversifies RIOT’s operations beyond Texas, targeting 2GW of capacity.

Cleanspark’s Expansion

Cleanspark (NASDAQ:CLSK) acquired GRIID to expand its operations into Tennessee, as the consolidation is driven by the need for scale and efficiency in a competitive landscape.

Energy Information Administration Survey

The EIA announced a second attempt to survey the Bitcoin mining industry’s energy use after an initial attempt in February, with preliminary analysis indicating that cryptocurrency mining consumes 0.6%-2.3% of total US electricity.
– In response, Dominion Energy (NYSE:D) may need to build up to eight natural gas peaker plants in the next 10-15 years to meet growing power demands from data centers.

Updated Revenue Forecasts

Following 2Q24 earnings, BTIG updated revenue targets for Riot Platforms and Marathon Digital (NASDAQ:MARA):
– RIOT: $368 million (2024), $617 million (2025)
– MARA: $613 million (2024), $744 million (2025)

BTIG estimates Bitcoin prices at $62,000 for 2024 and $72,000 for 2025, with a continued upward price trajectory expected to boost miners’ margins.