US-based investment firm Kerrisdale has launched a full-scale attack on Bitcoin mining, criticizing the business model of the top Bitcoin miner in the country.
In response, the Bitcoin community has come to the defense of Bitcoin mining, emphasizing the financial opportunities and environmental benefits it provides.
Kerrisdale Capital, a US investment management firm, has initiated a fierce battle against Bitcoin mining, sparking significant interest within the crypto community. Through a series of posts on the X platform, the firm harshly criticized the industry and singled out RIOT Blockchain as the leading Bitcoin miner.
Describing the mining sector as a group of “snake oil salesmen”, Kerrisdale highlighted the financial challenges and negative environmental impact associated with it.
“We are declaring war on Bitcoin miners, a group of snake oil salesmen who are burning through investor capital and harming the environment. They should be removed from America, much like the Chinese RTO scams we helped eliminate a decade ago,” the firm declared.
Taking aim at the weak business model of Bitcoin mining, Kerrisdale specifically targeted RIOT Blockchain, a publicly traded Bitcoin mining company.
The firm pointed out that like other US-listed miners, RIOT’s business model is inefficient and relies on continuous cash burn, leading to constant ATM issuance to fund operations. Despite the high price of Bitcoin, RIOT’s mining operations have not been profitable post-halving.
Kerrisdale highlighted the capital-intensive, competitive, and regulatory scrutiny-heavy nature of the industry, stating that RIOT’s BTC production and holdings per share have declined over time.
While shorting RIOT, Kerrisdale expressed a positive stance on Bitcoin itself, praising the newly launched Bitcoin ETFs that have garnered over $50 billion in investments in less than six months.
In response to Kerrisdale’s criticism, the Bitcoin mining industry fought back, with figures like Daniel Batten of Marathon and Adam O of Upstream Data dismissing concerns about environmental impact. Steven Lubka of Swan Bitcoin pointed out Kerrisdale’s own financial struggles.
Investor Simon Dixon emphasized Bitcoin mining’s potential for renewable energy integration and methane emission reduction. Bitcoin educator Mark Harvey suggested a straightforward solution of buying and holding Bitcoin.
Despite facing backlash for its environmental impact, research shows that Bitcoin mining can stimulate economies, create jobs, and promote green energy initiatives.
As of the latest update, BTC is trading at $70,700, with a 3.5% increase in the last 24 hours, surpassing the $70,000 mark. The leading cryptocurrency continues to make headlines in the financial world.