- Hut 8 CEO Asher Genoot predicts far fewer bitcoin mining firms will file for bankruptcy in the coming years compared to 2022, attributing previous bankruptcies to overleveraging and unpreparedness for rising energy costs.
- Genoot anticipated increased mergers and acquisitions among smaller-scale bitcoin miners but suggests significant M&A activity or distress opportunities would likely require Bitcoin to retrace to $30,000 or $40,000, while also noting investors’ preference for large-scale operators post-halving.
A slew of bitcoin miners filed for bankruptcy in the crypto winter of 2022 but Hut 8 CEO Asher Genoot is adamant that things will be different after the upcoming halving.
Genoot predicts that BTC will be stable in the future
In a recent interview with Bloomberg, Hut 8 CEO Asher Genoot shared his insights on the future of bitcoin (BTC) mining firms, predicting a stark contrast to the tumultuous landscape of 2022. Genoot attributed the wave of bankruptcies in 2022 to overleveraging and a lack of preparation for escalating energy costs, which left several prominent players like Compute North, Celsius Mining, and Core Scientific in dire financial straits.
However, Genoot pointed out a significant shift in the industry’s dynamics since then, with bitcoin miners now favoring less leverage and relying more on debt-free capital from equity markets to sustain growth. This change, he believes, will lead to a considerable reduction in bankruptcies, buoyed by an expected surge in mergers and acquisitions among smaller-scale miners.
Also read: Bitfarms boosts BTC mining capacity with 51,908 ASICs acquisition
Bitcoin turbulent in the past several months
Genoot’s own strategic maneuvers, including the recent merger of Hut 8 Mining Corp with US Bitcoin Corp, underscore the industry’s ongoing evolution and adaptation to market dynamics. The resulting entity, Hut 8 Corp, now based in Miami, Florida, boasts a substantial bitcoin balance sheet, positioning itself as a formidable player in the market.
Historically, bitcoin has set new all-time highs approximately 6-12 months after the halving event, occurring three consecutive times in 2012, 2016, and 2020.
Bitcoin bucked this trend in recent weeks, surpassing its previous all-time high price of $68,990 on March 5, roughly 46 days out from the halving.
Several industry pundits look to the recent launch of spot Bitcoin exchange-traded funds in the United States as the main contributor to Bitcoin’s outsized and atypical price action in recent months.
