According to a report by CoinDesk, JPMorgan stated in a research report on Wednesday that hyperscalers and AI companies are exploring different alternative solutions to meet their energy needs, which could make bitcoin mining companies with favorable power contracts attractive acquisition targets.
After the Bitcoin halving, M&A activities in the mining sector are heating up. This week, cloud computing company CoreWeave and bitcoin mining company Core Scientific signed a 200 MW AI agreement, with reports that the mining company also made a cash offer to acquire the company, causing a significant increase in its stock price. Meanwhile, another large bitcoin mining company, Riot Platforms, made a hostile takeover offer to its competitor Bitfarms last month. According to Reuters, Riot Platforms announced today that they have acquired a 12% stake in Bitfarms.
JPMorgan stated in the report that the transaction with CoreWeave could potentially accelerate the participation of the crypto mining industry in high-performance computing (HPC). Within the research scope of the investment bank, the news about Core Scientific had the biggest impact on the Australian mining company Iris Energy, which JPMorgan described as an early player in high-performance computing and has the right to develop over 2 GW of power.
JPMorgan stated that this transaction could raise the valuation baseline for “secondary-scale miners” as a new group of buyers (hyperscalers) has emerged. The investment bank also added that by transferring power capacity away from miners, this could help “rationalize the Bitcoin network” and improve the profits of remaining operators.
JPMorgan estimated that publicly traded bitcoin mining companies in the US consume up to 5 GW of power and could potentially use another 2.5 GW of power, making them potential attractive targets.
Additionally, some bitcoin miners are facing financial pressures to exit the market after the recent halving event, making them more willing to accept transactions. Last week, brokerage firm Bernstein stated that Riot Platforms is in the best position to consolidate the mining sector as the miner has the financial capacity to carry out transactions.
Related reports: “JPMorgan: Bitcoin Mining Costs Reduced from $50,000 to $45,000” “Bitcoin Halving Leads to Large Number of Old Mining Machines Moving out of the US, Mainly to Africa and South America” “Cantor Fitzgerald Report: 11 Listed Mining Companies May Struggle to Profit from Mining Business after Bitcoin Halving”
