Bitcoin mining stocks outperformed other cryptocurrency-linked stocks on Thursday, driven by multiple takeover offers within the industry, which have ignited market speculation about future consolidation targets.
Shares of major miners such as Stronghold (SDIG), Core Scientific, and TeraWulf (WULF) surged more than 15%. Additionally, gains exceeded 10% for Iris Energy (IREN), Mawson (MIGI), Cathedra (CBIT), and Argo Blockchain.
Recently, one of the largest miners, Riot Platforms (RIOT), initiated a hostile takeover attempt of its peer, Bitfarms (BITF). Simultaneously, artificial intelligence firm CoreWeave proposed acquiring another mega-cap miner, CoreScientific (CORZ). Although both Bitfarms and CoreScientific rejected the offers, these moves have underscored the potential for mergers within the industry.
B. Riley analyst Lucas Pipes highlighted that power contracts and lower valuations could catalyze a consolidation phase among miners. “We believe that the bullish outlook on the power market could catalyze increased M&A activity this year, especially as wide discrepancies in valuation remain,” Pipes wrote in a report.
JPMorgan analysts echoed this sentiment, suggesting that AI and cloud computing firms, aiming to diversify their power sources, might target bitcoin miners. The bank also noted that some miners may seek to exit the market following the Bitcoin halving—a periodic event that cuts mining rewards and pressures weaker firms—thereby accelerating M&A activity.
Both Wall Street firms agree that larger miners like Riot and Marathon Digital (MARA) are well-positioned to lead this wave of consolidation.
In conclusion, the recent surge in bitcoin mining stocks underscores the market’s anticipation of increased merger and acquisition activity, driven by strategic positioning and valuation opportunities in the evolving power market landscape.
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