Annual Bitcoin Conference in Nashville

The annual Bitcoin conference, held in Nashville last week, made waves with high-profile promises and announcements. Marketed as the world’s largest forum for crypto enthusiasts, the event marked the largest gathering to date, attracting over 20,000 attendees, according to a Jefferies research report.

Political Participation

The conference saw significant political attendance, including former President Donald Trump, multiple Republican politicians, and several Democrats. Jefferies noted that Trump’s promises to appoint crypto-friendly regulators could tie Bitcoin’s near-term price to the outcome of the US Presidential election.

Trump pledged to establish a crypto industry presidential advisory council and to make the US the “crypto capital of the planet.”

Market Insights

Turning to the fundamentals, Jefferies analysts adjusted their predictions, cutting Marathon Digital’s (NASDAQ:MARA) target to $21.57 from $22 per share and raising Argo Blockchain’s (NASDAQ:ARBK) target to $1.63 from $1.20. These price targets stem from a discounted cash flow analysis, considering key risks such as:
– Lower Bitcoin prices
– Rapid increases in network hash rate
– Construction delays at hosting providers
– Higher costs of ASIC miners
– Regulatory intervention

Despite the recent halving event, many miners were surprised to see the network hashrate decline. Jefferies noted that while Bitcoin prices rose by 5% since the halving, the hashrate dropped by 3% in May and 5% in June, improving mining profitability more than initially feared.

Mining Revenue Insights

Jefferies reported that mining revenue per EH has decreased by roughly 40-45%, rather than halving completely. Major Bitcoin miners remain in growth mode, with:
– Marathon Digital Holdings aiming for 50 EH by the end of 2025
– Riot Platforms (NASDAQ:RIOT) targeting 56.6 EH
– CleanSpark (NASDAQ:CLSK) also aiming for 50 EH

Some miners are diversifying their revenue sources by shifting towards AI and GPU computing requirements. Core Scientific (NASDAQ:CORZ) has emerged from bankruptcy and redirected about half of its MW capacity towards AI data centers. Jefferies highlighted this shift as a strategy to meet strong demand and diversify revenue.

M&A Activity

Furthermore, Jefferies anticipates increased mergers and acquisitions (M&A) activity within the sector, emphasizing that access to power is becoming more valuable than mining fleets. Recently, Riot acquired Block Mining, a private platform with nearly 300 MW of power capacity across three sites in Kentucky.