Bitcoin Mining Stocks Soar Amid Takeover Frenzy

Bitcoin mining stocks outperformed other stocks tied to the cryptocurrency on Thursday after a slew of industry takeover bids drew the market’s attention to the question of who could be the next target.

Shares of miners such as Stronghold (SDIG), Core Scientific, and TeraWulf (WULF) are up more than 15%. Gains at Iris Energy (IREN), Mawson (MIGI), Cathedra (CBIT) and Argo Blockchain exceeded 10%.

Recently, one of the largest miners, Riot Platforms (RIOT), launched a hostile takeover attempt of its peer Bitfarms (BITF), while AI firm CoreWeave proposed acquiring another mega-miner, CoreScientific (CORZ).

Although Bitfarms and CoreScientific rejected the offers, their takeover attempts reminded investors that the industry may be ready for mergers.

Read more: Bitcoin Halving Prepares to Attack Darwinism on Miners

B. Riley analyst Lucas Pipes said energy contracts and low valuations could be the catalyst that starts a consolidation phase for miners.

“We believe the bullish outlook on the energy market could catalyze increased merger and acquisition activity this year, especially as wide disparities in valuation persist,” he wrote in a report.

JPMorgan analysts agreed with Pipes and stated that artificial intelligence and cloud computing companies looking to diversify their power sources could go after bitcoin miners. The bank also said merger and acquisition activity will likely accelerate as some miners look to exit this market following the Bitcoin halving, which has reduced mining rewards and put pressure on weaker firms.

Both Wall Street firms said larger miners like Riot and Marathon Digital (MARA) are likely best positioned to lead this wave of consolidation.