M&A Szn Heats Up ???? As $RIOT Buys 10% of $BITF In Takeover Effort
Mario Andres Gutierrez, Msc
Critical Energy & Digital Infrastructure | Email in Contact Info
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W22 ‘24 Vibe Check
The Overview Vibe
During a week of blunted regulatory and market news, Bitcoin kept its horizontal vibes around $68,000. Hashprice marginally outperformed Bitcoin price thanks to a slight push in transaction fees. With the heat starting to cook in Texas, hashrate retreated from ATHs to ~580. With difficulty expected to adjust upward marginally, could this hashrate retreat be some pre-difficulty adjustment to soften the downward pressure on hashprice? While this speculation has been noticed in the past, who has 70 EH/s to flick offline lol?
The Biden Administration followed through on their SAB 21 threat while Trump’s campaign finally was able to accept Bitcoin via Lightning, after not being able to during his initial “crypto” donation launch. BTC from the MT Gox recover process moved in the first time in too long as Blackrock’s IBIT Spot Bitcoin ETF overtook GBTC in AUM. Healthcare tech NASDAQ-listed company Semler Scientific announced a Bitcoin treasury strategy. Looks like the FASB accounting rule update was what the public sector needed to do their best Saylor impression.
Ok now on to the mining. So…this week kicked off like a hot tamale! Riot didn’t wake me to drink my cafecito to drop their unsolicited proposal take over of Bitfarms last Monday. With a purchased 9.25% stake and $2.30/share offer, the Texas Giga-sized miner looked to acquire the Canadian-based peer whose CEO recently had quit and sued his board for $27M. After Bitfarms responded with TDLR: “Thanks no thanks, I got mine”, stating that only Riot had not signed an NDA that other interested peers had signed.
With other potential higher bids incoming Riot upped to 10% ownership in Bitfarms. Bitfarms, the prettiest girl in the room AKA “the only mining firm with all the development pipeline and no debt” held a shareholder vote where Co-founder Emiliano Grodzki was voted off the board. As Bitfarms looks to align shareholders with its latest board update and fend off larger fish in the market, it is almost certain that Riot is not alone in looking to acquire the geographically diversified and well-positioned miner.
If you are interested in thinking about where hashrate is going, dive into this high-quality post by pennyether mining YTD. While pennyether thinks we end the quarter at 640 EH/s, is there a chance ERCOT could start incentivizing for massive curtailment early in the summer? West Texas miner Cormint boasted $18/MWH power cost in April in their latest results (way to go y’all!). With generator Vistra Corp planning to add 2 GWs of dispatchable natty power gen in ERCOT, 850 MW of it in West Texas, might we see more competition for economic curtailment margins for miners in the future? Will we see a split in strategy from the ERCOT miners riding real-time pricing and others performing economic curtailment? Does it even matter for seasonal hashrate relationships since a Russian republic is building out 3 EH?
All I know is that I won’t be turning down my AC this summer, it is hot y’all! LOL. Stay hydrated and call your mom. WE BALLING OUT AMIGOS!
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