Riot Platforms (RIOT) is the most ambitious company trying to consolidate the Bitcoin (BTC) mining industry, hoping to build the world's largest publicly traded mining company, brokerage Bernstein said in a research report on Tuesday.
The Colorado-based company has no debt and more than $1.3 billion in cash and bitcoin on its balance sheet, giving it the financial strength to consolidate the mining sector, the report said.
The riots get Rival bitcoin miner BitFarms (BITF) has acquired a 9.25% stake in the company, offering to buy all of BITF's outstanding shares for $2.30. He said on Tuesday.
“Bitcoin mining is becoming tougher for smaller players as limited capital is available to ramp up in the global race for hash power,” analysts Gautam Chugani and Mahika Sapra wrote.
Bernstein expects the U.S. bitcoin mining sector to consolidate into around five large companies with significant capacity, noting that there are currently more than 20 publicly traded mining companies.
“If electricity becomes the largest constraint in scaling artificial intelligence (AI) computation, we believe that bitcoin miners are a strategic asset with significant operational capabilities in controlling power, land, and running data centers,” the authors write.
The broker noted that smaller miners are receiving competitive interest from AI data centers looking to buy sites, while the largest bitcoin miners need to step up their M&A plans to remain “long-term strategically relevant,” the report said.
Bernstein rates Riot shares an Outperform rating and has a price target of $22. At the time of writing, the stock is trading around $10.30.
