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By Austin DeNoce, Benzinga
Following the Bitcoin halving in April, there's a renewed focus on the potential of Bitcoin miners amid the anticipated bull cycle. The halving event, which reduced Bitcoin's inflation rate from 1.8% to 0.9%, has historically acted as a catalyst for bull markets. This reduction emphasizes Bitcoin’s scarcity and can potentially rally investors around its long-term value proposition, especially amid a landscape of persistent fiat currency inflation. For many investors, this period potentially presents an exceptional opportunity – particularly if they choose the right Bitcoin miner to invest in. Below, we'll explore three major players in the Bitcoin mining industry: Marathon Digital Holdings (NASDAQ: MARA), Riot Platforms (NASDAQ: RIOT) and Bitdeer (NASDAQ: BTDR).
Marathon: The Mining Goliath
Marathon, with a market cap of about $5.5 billion, stands as the largest publicly-traded Bitcoin miner, with approximately 210,000 mining rigs and 29.9 exahashes per second (EH/s) globally. The company is focused on controlling or influencing each aspect of its operations, from mining pools to ASICs, partly through outside investments. Marathon also employs a long-term strategy of holding (HODLing) Bitcoin while reinvesting in its operations. The company’s operations are global, utilizing both self-hosting and outsourcing to deploy miners as efficiently as possible and diversify its geographic exposure.
The company places a strong emphasis on sustainability, positioning its miners near renewable energy sources to both utilize excess energy and contribute to renewable projects. This commitment extends to its environmental, social and governance (ESG) principles, with goals like achieving carbon neutrality. It has invested significantly in technology to optimize operations, focusing on utilizing stranded energy resources and even selling excess heat back into various processes. However, Marathon has yet to deploy its own in-house mining technology, leaving it exposed to potential counterparty risk.
Riot Platforms: Leading With Capacity
Riot Platforms, which has a market cap of about $3 billion, owns North America’s largest Bitcoin mining facility by developed capacity. The company's operations are centered in Texas and Colorado, where it not only mines Bitcoin but also provides infrastructure for other institutional-scale mining entities. Like most miners, Riot is engaged in enhancing its capabilities to mine Bitcoin more efficiently while supporting the Bitcoin blockchain, but it differentiates itself by selling energy back to the Texas grid during peak demand to improve its cost efficiencies.
Riot operates three business segments: Bitcoin Mining, Data Center Hosting and Engineering. Its mining segment boasts approximately 113,000 miners, achieving a hash rate capacity of 12.4 EH/s. Its hosting segment focuses on providing co-location services at its Rockdale Facility, which offers over 700 megawatts of total developed capacity. Meanwhile, its engineering segment designs and manufactures power distribution equipment and custom-engineered electrical products, further supporting its core mining operations.
Bitdeer: The Under-The-Radar Innovator
Bitdeer, with a comparatively smaller market cap of about $660 million, manages roughly 221,000 mining rigs and 21.2 EH/s. The company primarily stands out from its competitors due to its focus on becoming the first entirely vertically integrated miner, with a particular focus on semiconductor technology – potentially eventually eliminating counterparty risk altogether. The company has made significant strides in chip architecture with its custom SEAL01 Bitcoin mining chip, aiming for independence in a market dominated by a few manufacturers.
Unlike its competitors, Bitdeer does not hold Bitcoin on its balance sheet, focusing instead on operational earnings. However, further insight is yielded when accounting for that difference. According to Bitdeer, it reported the highest industry-adjusted EBITDA in 2023 when excluding the mark-to-market Bitcoin adjustments exhibited by competitors like Marathon and Riot.
Bitdeer operates across three main business lines: self-mining, hash rate sharing and comprehensive hosting solutions, broadening its impact within the Bitcoin mining market. The company has also expanded its infrastructure in Norway and Ohio and deployed an NVIDIA (NASDAQ: NVDA) DGX SuperPOD H100 system for AI model training – underscoring the breadth of its business. With 25% of its workforce dedicated to R&D, Bitdeer is committed to diversification and capturing new market opportunities as a competitive up-and-comer in the sector that is currently trading at a lower market cap than its larger competitors.
The Potential Digital Golden Opportunity In Bitcoin Mining
As the Bitcoin market evolves post-halving, the strategic positioning of companies like Marathon, Riot Platforms and Bitdeer suggests they are well-prepared to capitalize on the potentially upcoming bull cycle. Each company, with its unique strengths and strategic focus, offers different opportunities for investors looking to benefit from the next wave of Bitcoin's growth. While its rivals are larger, Bitdeer, with its innovative approach to technology and efficiency, may be one to watch, given the room for growth and relatively lower name recognition in the industry.
Featured photo by Dmytro Demidko on Unsplash.
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