Bitcoin Mining Difficulty Slumped Last Week in Biggest Decline Since Crypto Winter: Bernstein

The report stated that Bitcoin mining difficulty dropped by approximately 6% last week.

The broker noted that the market share of the lowest-cost Bitcoin miners has increased since the halving.

Bernstein said the pause in the Bitcoin rally is good for low-cost miners as hashrates remain limited.

Bitcoin {{BTC}} mining difficulty fell nearly 6% last week, the most significant decline since the crypto winter of December 2022, which is a positive development for some miners, broker Bernstein said in a research report on Monday.

The broker noted that with Bitcoin prices falling and costs nearly doubling since the halving, high-cost mining equipment has shut down, leading to a drop in hashrate.

“With the decline in hash rate, the market share of our 3 covered miners increased by almost 20 basis points (bps) post-halving,” analysts Gautam Chhugani and Mahika Sapra wrote, adding: “We expect the top 3 listed bitcoin miners to continue organic and M&A Consolidating market share through acquisition-led expansion.

Hash rate refers to the total combined computing power used to mine and process transactions on the proof-of-work blockchain.

The report stated that leading bitcoin miners Riot Platforms (RIOT) and CleanSpark (CLSK) have the lowest production costs with their strong balance sheets and cash positions.

“A temporary pause in Bitcoin price is actually good for established low-cost Bitcoin miners, as hashrates remain limited and strong miners can implement aggressive capex and merger and acquisition plans to grow market share,” the authors wrote.

“And finally, when Bitcoin price momentum picks up, miners can generate higher dollar revenue through higher production,” the report added.

The broker does not foresee a major decline in the price of bitcoin and expects the cryptocurrency to remain in a range and move higher once it sees allocations from spot exchange-traded funds (ETFs), registered investment advisors (RIAs) and asset platforms. and other institutional funds.

Bernstein has an outperform rating on CleanSpark and Riot Platforms and a market outperform rating on Marathon Digital (MARA).

Read more: Bitcoin Miners Received Abnormal Transaction Fees Since Halving: Bernstein