US investment firm Kerrisdale is launching a full-scale attack on Bitcoin mining, criticizing the business model of the leading Bitcoin miner in the United States. In response, the Bitcoin community is defending the industry, emphasizing the financial opportunities and environmental benefits it provides.
Kerrisdale Capital, a US-based investment management firm, has declared a war on Bitcoin mining, causing a stir within the crypto community. Through a series of posts on the X platform, the firm delivered a harsh critique of the industry and specifically targeted RIOT Blockchain, the top Bitcoin miner.
In a bold statement, the firm described Bitcoin miners as “snake oil salesmen” who are burning through investor capital and harming the environment. They called for the industry to be banned from America, likening it to the Chinese RTO frauds that were ousted a decade ago.
Highlighting the flaws in the business model of Bitcoin mining, Kerrisdale Capital singled out RIOT Blockchain, a publicly traded company in the sector. The firm criticized RIOT’s continuous cash burn and reliance on ATM issuance to fund operations, despite Bitcoin prices reaching all-time highs.
Kerrisdale Capital pointed out that Bitcoin mining is capital-intensive, fiercely competitive, and subject to increasing regulatory scrutiny. They noted that RIOT’s BTC production and holdings per share have been declining, with shareholders only benefiting if Bitcoin prices rise.
While Kerrisdale Capital is shorting RIOT, they expressed a positive stance on Bitcoin itself, particularly praising the newly launched Bitcoin ETFs. These ETFs have attracted significant investment in a short period, surpassing $50 billion in less than six months.
In response to Kerrisdale’s criticism, the Bitcoin mining industry defended itself against claims of environmental harm and financial instability. Industry leaders like Daniel Batten and Adam O highlighted the potential for renewable energy integration and methane emission reduction. Meanwhile, Steven Lubka of Swan Bitcoin questioned Kerrisdale’s financial standing.
Investor Simon Dixon emphasized the positive impact of Bitcoin mining on economies and job creation. Mark Harvey suggested a straightforward approach to benefiting from Bitcoin by buying and holding the cryptocurrency.
Despite facing backlash over environmental concerns, Bitcoin mining has shown promise in boosting economies and promoting green energy initiatives. As of the latest update, BTC is trading at $70,700 with a 3.5% increase in the past 24 hours, surpassing the $70,000 mark.