Bitrabo Editorial
An investment firm based in the US, Kerrisdale Capital, has stirred controversy with its public statements targeting Bitcoin mining companies. Kerrisdale launched an aggressive campaign against what it refers to as deceptive practices in the BTC mining industry, alleging financial mismanagement and environmental harm.
Recently, Kerrisdale initiated a strategy by reaching out to officials in Texas and state senators, urging regulatory intervention. The firm disclosed its financial positioning, revealing a short position in RIOT stock paired with a long position in Bitcoin.
Kerrisdale criticized RIOT Blockchain’s business model, highlighting its continuous cash burn and lack of profitability post-halving despite the high Bitcoin market prices.
The company also released financial data showing RIOT’s significant stock issuances and cash burn, with no tangible increase in Bitcoin production per share or holdings per share. Kerrisdale argues that relying solely on rising Bitcoin prices for shareholder benefit is an inadequate investment approach.
In addition, Kerrisdale scrutinized Bitcoin mining for its substantial energy consumption and potential misalignment with environmental objectives due to incentives that may not be sustainable.
Response from Bitcoin Mining Industry and Experts
The industry swiftly responded to Kerrisdale’s accusations, with key figures defending the sector and questioning the firm’s motives and understanding. Daniel Batten, from CH4 Capital and Marathon advisory board, suggested Kerrisdale focus on improving investor returns rather than attacking industry practices.
Adam O from Upstream Data defended Bitcoin mining’s positive environmental impact, countering Kerrisdale’s criticism. Steven Lubka from Swan Bitcoin criticized Kerrisdale’s strategy, pointing out their struggles with shorting MicroStrategy (MSTR) and decreasing assets under management.
Simon Dixon, an angel investor, debunked misconceptions concerning Bitcoin mining’s environmental impact, emphasizing its role in reducing methane emissions and its synergy with renewable energy sources like solar and wind.
Mark Harvey, a Bitcoin educator, advocated for the benefits of buying and holding Bitcoin for higher returns and building stronger connections.
As of the latest update, BTC was trading at $70,820.