Kerrisdale, a US investment firm, has launched a full-scale attack on Bitcoin mining, criticizing the industry’s business model and singling out the top Bitcoin miner in the United States.
The Bitcoin community has come to the defense of Bitcoin mining, emphasizing the financial opportunities and environmental advantages it offers.
Kerrisdale Capital, a US-based investment management company, has initiated a fierce battle against Bitcoin mining, causing a stir within the crypto community. Through a series of posts on the X platform, the firm harshly criticized the industry as a whole and specifically targeted RIOT Blockchain, the leading Bitcoin miner.
In a multi-part thread, Kerrisdale described Bitcoin miners as “snake oil salesmen,” highlighting the financial challenges and negative environmental impact associated with the industry.
“We are launching a crusade against Bitcoin miners, a group of snake oil salesmen who are burning through investor capital and harming the environment. They should be expelled from America, much like the Chinese RTO frauds we helped remove a decade ago,” the firm declared.
Critiquing the flawed business model of Bitcoin mining, Kerrisdale took aim at RIOT Blockchain, a publicly traded Bitcoin mining company.
According to the firm, RIOT’s business model is unsustainable, resulting in continuous cash burn and shareholder dilution through frequent ATM issuances. Despite the high price of Bitcoin, RIOT’s mining operations have failed to turn a profit post-halving.
Kerrisdale pointed out that Bitcoin mining is capital intensive, fiercely competitive, produces a commodity product, and is facing increasing regulatory scrutiny.
While Kerrisdale disclosed its short position on RIOT, it expressed a positive outlook on Bitcoin itself, particularly praising the newly launched Bitcoin ETFs which have attracted significant investment in a short period.
In response to Kerrisdale’s criticism, the Bitcoin mining industry defended itself against allegations of environmental harm and financial instability. Figures like Daniel Batten of Marathon and Adam O of Upstream Data refuted concerns about environmental impact, while Steven Lubka of Swan Bitcoin highlighted Kerrisdale’s own financial difficulties.
Investor Simon Dixon countered by highlighting the potential for renewable energy integration and methane emission reduction in Bitcoin mining. Bitcoin educator Mark Harvey suggested a straightforward solution: investing in and holding Bitcoin.
Despite facing criticism for its environmental impact, Bitcoin mining has proven to have economic benefits, job creation potential, and the ability to drive the adoption of green energy.
At the time of writing, Bitcoin is trading at $70,700, experiencing a slight decline over the past 24 hours but still showing a 3.5% increase that pushed it above the $70,000 mark.