Bitcoin (BTC) mining difficulty dropped a notable 6% last week, marking the biggest decline since the cryptocurrency winter in December 2022, according to a recent report from Bernstein. This slowdown is seen as a beneficial change for miners, especially those with less mining volume. costs.
According to analysts Gautam Chhugani and Mahika Sapra, this adjustment in mining difficulty reflects broader market dynamics following the Bitcoin halving, with high-cost mining equipment being phased out due to rising costs and falling Bitcoin prices. do. This has reduced the overall hashrate (the total computational power used to mine and process transactions on the Bitcoin proof-of-work blockchain).
The report highlights that the hashrate decline has allowed low-cost miners to increase their market share by about 20 basis points after cutting it in half. Companies like Riot Platforms (NASDAQ:RIOT) and CleanSpark (NASDAQ:CLSK), known for their low production costs and strong balance sheets, are particularly well positioned to benefit. These companies are expected to continue to strengthen their market share through organic growth and mergers and acquisitions.
Bernstein also points out that a temporary stabilization of the Bitcoin price could be advantageous for these efficient miners and allow them to utilize expansion strategies without the pressure of rising hash rates. Moreover, when the Bitcoin price eventually regains momentum, these miners will be in a position to generate more revenue due to their higher production capacity.
Despite the current fluctuations, Bernstein does not expect the Bitcoin price to fall significantly. They predict that cryptocurrencies will remain range-bound in the near term as cash exchange-traded funds (ETFs) begin receiving allocations from registered investment advisors (RIAs), asset platforms and other institutional investors. .
Bernstein maintains an ‘Outperform’ rating for CleanSpark and Riot Platforms, indicating a positive outlook for these companies, while Marathon Digital (NASDAQ:MARA) maintains a ‘Market Perform’ rating, suggesting more neutral expectations.
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