“In 5 years, the concept of Bitcoin mining will fade away,” declared the visionary CEO of a renowned corporation, shedding light on the rationale behind the bold statement.
Sahm Adrangi, the innovative mind behind Kerrisdale Capital, shared the company’s unique perspective during an exclusive interview. Adrangi predicted that the Bitcoin (BTC) mining industry would soon become irrelevant, making it one of the most questionable business models ever encountered in Kerrisdale’s extensive history of short selling.
Adrangi swiftly criticized the industry, highlighting the ease with which companies worldwide can purchase ASIC miners from China, establish operations in regions offering cheaper electricity costs, and undercut U.S. miners. This simplicity of entry into the market, according to Adrangi, is a significant flaw.
Additionally, the insightful CEO emphasized that U.S.-based Bitcoin miners are currently operating at a loss and are sustaining themselves primarily by issuing more shares. He pointed out that these companies are not generating profits but are instead resorting to stock comp and purchasing additional ASICs, dubbing the entire industry as nothing short of a scam.
While Kerrisdale’s report specifically targeted Riot Platforms, Adrangi intimated that he intends to publish similar criticisms of other entities within the Bitcoin mining industry. Adrangi stressed the unsustainable nature of Bitcoin mining and compared it to the boom and subsequent bust experienced by the industry in 2017-2018, where CEOs took questionable actions to sustain unviable business models.
In response, Riot Platforms issued a statement refuting Kerrisdale’s claims and expressing confidence in its ambitious growth plans for 2024 and its ability to deliver strong financial performance.
Undeterred, Adrangi dismissed Riot’s growth plans as merely a dilution of shareholder shares and pointed out that the company had diluted shareholders by 18% this year alone. Adrangi predicted further dilution as Riot Platforms continues investing heavily in capital expenditures without generating proportional returns.
Moreover, Adrangi touched on the environmental impact of Bitcoin mining, arguing that the energy-intensive practice is wasteful and detrimental. He highlighted how countries like China have expelled Bitcoin miners due to their substantial environmental footprint, raising concerns about the suitability of Bitcoin mining operations within U.S. borders.
It is important to note that the opinions expressed in this text are not intended as investment advice but rather as an exploration of a unique point of view.