Bitcoin (BTC) miners are adding significant capacity, according to a research report from broker Bernstein. The 16 largest publicly listed mining companies account for 16% of total BTC mined, and their combined mining capacity is currently 72 exahashes per second (EH/s). The firms are planning to increase that by 182% in the next 2-3 years.
The bitcoin price is currently in the vicinity of $30,000, and 15 of the companies have production costs below $15,000 per BTC. With the upcoming halving, that would double the cost of production, and could push a few miners to break-even, assuming no price increase from here. However, if the market sees positive momentum from bitcoin exchange-traded-fund (ETF) approvals and increased institutional participation, that would give miners enough margin room for the 2024 halving.
The broker notes that three of the miners have a debt-to-equity ratio of more than 1, which reduces their ability to withstand depressed bitcoin prices. Four – Riot (RIOT), Marathon Digital (MARA), Hut 8 (HUT) and Hive Digital (HIVE) – hold bitcoin on their balance sheet. This allows these firms to wait for higher prices before selling, and make greater realized gains on the crypto they have mined.