Kerrisdale Capital Initiates Conflict with Bitcoin Miners Prompting Strong Reaction from Industry

US-based investment firm Kerrisdale has launched a full-scale attack on Bitcoin mining, criticizing the business model of the country’s leading Bitcoin miner.
In response, the Bitcoin community has defended the industry, emphasizing the financial opportunities and environmental benefits it offers.
Kerrisdale Capital, a US investment management firm, has initiated a direct confrontation with Bitcoin mining, attracting significant attention from the cryptocurrency community. In a series of posts on the X platform, the firm harshly criticized the industry and specifically targeted RIOT Blockchain, the top Bitcoin miner.
Describing the mining sector as a group of “snake oil salesmen”, Kerrisdale Capital highlighted the financial challenges and negative environmental consequences associated with Bitcoin mining.
“We are declaring war on Bitcoin miners, a sector filled with individuals who are destroying both investor funds and the environment. They should be expelled from America, much like the Chinese RTO frauds we helped eliminate a decade ago,” the firm announced.
Addressing the flawed business model of Bitcoin mining, Kerrisdale Capital focused its criticism on RIOT Blockchain, a publicly traded Bitcoin mining company.
According to the firm, companies like $RIOT operate on a cash-burning cycle, relying on constant ATM issuance to sustain their operations. Despite the surge in Bitcoin prices, RIOT’s mining operations are not profitable post-halving.
Noting the capital-intensive nature of the business, Kerrisdale Capital highlighted the extreme competition, the standardization of the product, and the growing regulatory oversight in the industry.
While Kerrisdale Capital has taken a short position on RIOT, it expressed bullish sentiment towards Bitcoin itself. The firm praised the recently launched Bitcoin ETFs, which have attracted over $50 billion in investments in under six months.
In response to Kerrisdale Capital’s critique, the Bitcoin mining community pushed back against the negative portrayal. Figures like Daniel Batten of Marathon and Adam O of Upstream Data dismissed concerns about environmental impact, while Steven Lubka of Swan Bitcoin pointed out the financial difficulties faced by Kerrisdale Capital.
Investor Simon Dixon highlighted the potential for integrating renewable energy and reducing methane emissions in Bitcoin mining. Bitcoin educator Mark Harvey proposed a straightforward solution: investing in and holding Bitcoin.
Despite facing criticism for its environmental impact, research has shown that Bitcoin mining can stimulate economies, create job opportunities, and drive the adoption of green energy solutions.
As of the latest update, BTC is trading at $70,700, experiencing a slight decrease in the past 24 hours. The leading cryptocurrency has seen a 3.5% increase, surpassing the $70,000 mark.