An American investment firm known as Kerrisdale Capital has launched a fierce attack on Bitcoin mining, criticizing the business model of the top Bitcoin miner in the United States. In response, defenders of Bitcoin mining have emphasized the financial opportunities and environmental benefits associated with the industry.
Kerrisdale Capital, a U.S.-based investment management firm, has declared war on Bitcoin mining, creating a stir within the cryptocurrency community. In a series of posts on a popular platform, the firm harshly criticized the industry as a whole, particularly targeting RIOT Blockchain, the leading Bitcoin miner.
Describing the mining industry as a group of “snake oil salesmen”, Kerrisdale Capital highlighted the financial challenges and negative environmental impact of Bitcoin mining. The firm expressed its intention to combat Bitcoin miners, comparing them to fraudulent Chinese companies that were expelled from America a decade ago.
Taking aim at RIOT Blockchain, a publicly traded Bitcoin mining company, Kerrisdale Capital criticized the company’s business model, labeling it as a cash-burning operation that relies on continuous fundraising from retail shareholders. Despite the high value of Bitcoin, the firm noted that RIOT’s mining operations have not been profitable post-halving.
Kerrisdale Capital stressed that Bitcoin mining is capital intensive, highly competitive, produces a commodity product, and faces increasing regulatory scrutiny. While shorting RIOT, the firm expressed a positive outlook on Bitcoin itself, particularly praising the newly introduced Bitcoin ETFs, which have attracted significant investment within a short period.
In response to the criticism from Kerrisdale Capital, the Bitcoin mining industry defended its practices. Figures within the industry, such as Daniel Batten of Marathon and Adam O of Upstream Data, dismissed concerns about environmental impact. Steven Lubka of Swan Bitcoin pointed out Kerrisdale’s own financial challenges. Investor Simon Dixon highlighted the potential for renewable energy integration in Bitcoin mining, while Bitcoin educator Mark Harvey advocated for a simple investment strategy of buying and holding Bitcoin.
Despite facing criticism for its environmental impact, research has shown that Bitcoin mining can contribute to economic growth, job creation, and the promotion of green energy initiatives. Currently, Bitcoin is trading at $70,700 after a slight decline in the last 24 hours, with a 3.5% increase that pushed it above the $70,000 mark.