Kerrisdale Capital, an funding administration agency, has launched a scathing assault on the Bitcoin mining trade in the USA, branding it a haven for “snake oil salesmen” that devour investor capital and hurt the atmosphere.

Funding Agency Assaults Bitcoin, Claims Mining Mannequin Flawed

In a publish on X, the administration agency introduced that it had began its struggle on the burgeoning trade by drafting two letters to Texas authorities.

One is addressed to the Navarro Metropolis Fee, the place Riot Blockchain has set up its base. One other letter was despatched to the Texas state senators.

The funding agency is urging them to crack down on Bitcoin mining within the state, evaluating it to the fraudulent Chinese language schemes uncovered a decade in the past.

What stands out is that their battle will probably be centered on Bitcoin mining operations in Texas. Contemplating its low power prices, the state is a serious hub for Bitcoin mining in the USA.

If something, their opposition to Bitcoin mining has led Kerrisdale Capital to reveal that they’re actively shorting Riot Blockchain’s inventory. The funding agency thinks the mining farm is a “prime example of a dysfunctional Bitcoin mining business model” trapped in “a vicious cycle of cash burn.”

Of their evaluation, these public mining corporations largely depend on constantly issuing new shares to fund operations, even when Bitcoin is at or close to all-time highs. The funding agency argues it is a signal of a flawed enterprise mannequin.

Kerrisdale Capital additionally identified profitability issuers for these Bitcoin mining operations, even when costs are at file ranges. In these cycles, they declare that Riot Blockchain has struggled to be in inexperienced. Past this, they cite environmental considerations and rising regulatory scrutiny surrounding mining.

Moreover, they suppose the provision of spot Bitcoin exchange-traded funds (ETFs) means proudly owning shares of mining farms is an pointless danger. Over the past six months, spot ETF issuers in the USA have purchased billions price of BTC on behalf of their purchasers.

Miner Fights Again, Community Sturdy

As anticipated, the assault has sparked outrage. Bob Burnett, the founding father of Barefoot Mining, has vehemently rejected the “snake oil salesman” label, emphasizing the dedication and exhausting work of securing the community.

Of notice, the founder factors to the resilience of many mining corporations throughout difficult market situations and their position in sustaining the integrity of the broader ecosystem.

Even with the criticism, Mempool.Area knowledge reveals that the whole hash price stays excessive and regular at over 500 EH/s when writing. On the identical time, even after Halving, Foundry USA stays the most important mining farm on this planet by hash price.

Function picture from Canva, chart from TradingView