Key Points
- Bitcoin miners are diversifying their revenue streams and engaging in strategic deals after the latest Bitcoin halving.
- Share prices in the sector are increasing amid M&A activity and potential over reducing miner rewards.
Following the latest halving of Bitcoin, miners are releasing updates on their May production.
In the aftermath of this event, several major players are striving to increase revenues through strategic deals and diversification.
Miners Diversify Revenues
Companies like Core Scientific have been exploring ways to boost revenues since the Bitcoin halving in April, which cut miner rewards by 50%.
Likewise, other mining firms such as Bit Digital and Hut 8 have been observed to diversify their revenue streams into AI.
Core Scientific, a North American Bitcoin mining and hosting services provider, recently signed a series of 12-year contracts with AI Hyperscaler CoreWeave, a cloud computing company.
However, Core Scientific turned down CoreWeave’s buyout offer of over $1 billion, stating it “significantly undervalues” the company.
Attracting Potential Buyers
Analysts at JPMorgan perceive this news about Core Scientific as making the entire sector more appealing to potential buyers.
They believe that Hyperscalers and AI firms are considering alternatives, such as leasing power/datacenter capacity from Bitcoin miners or even acquiring them outright.
The analysts also noted that some operators are feeling the financial strain from the recent block reward halving and are actively considering exit strategies.
This news about Core Scientific is particularly relevant to Iris Energy, which was early to adopt HPC and has secured the rights to develop more than 2 gigawatts (GW) of power.
TeraWulf has also announced pilot HPC programs.
Share Prices Rise Amid M&A Activity
Riot Platforms increased its ownership stake in Bitfarms to 12% ahead of a special meeting of the company’s shareholders.
Riot Platforms had previously purchased a 9.25% stake in Bitfarms after a rejected acquisition proposal, which would have valued the latter at $950 million and resulted in one of the largest publicly listed Bitcoin mining firms.
Bitdeer announced that it has entered into a $140 million share purchase agreement with FreeChain Inc., also known as Desiweminer, a fabless crypto ASIC design company.
Shareholders seem to prefer the potential of M&A over reducing miner rewards, as several stocks have seen a surge this week.
Iris Energy shares have risen by over 35% in the past five trading days, while TeraWulf shares have increased by 32%.
Core Scientific’s shares soared by 40% on Tuesday alone and have risen by 65% over the past five days.
Despite being hit by a short-seller report, shares of two of the sector’s largest companies by market cap, Marathon Digital and Riot Platforms, are also trading higher.
