Kerrisdale, a US investment firm, has launched a full-scale attack on Bitcoin mining, criticizing the industry’s business model and singling out a prominent miner, RIOT Blockchain. The firm’s harsh words have sparked a heated debate within the Bitcoin community, with defenders highlighting the financial opportunities and environmental benefits of mining.
In a series of posts on social media platform X, Kerrisdale Capital declared war on Bitcoin miners, labeling them as “snake oil salesmen” who are squandering investor capital and harming the environment. The firm specifically targeted RIOT Blockchain, accusing it of operating a financially unsustainable business model that relies on continuous cash burn and retail shareholder funding.
Despite the recent surge in Bitcoin prices, Kerrisdale pointed out that RIOT’s mining operations remain unprofitable, attributing this to the capital-intensive and fiercely competitive nature of the industry. The firm also criticized the company for its declining production efficiency and shareholder benefits being solely dependent on Bitcoin price increases, rather than sound investment strategies like low-fee ETFs.
While Kerrisdale admitted to shorting RIOT, it expressed support for Bitcoin itself and praised the introduction of Bitcoin ETFs, which have attracted significant investment in a short period. However, the crypto community rallied in defense of Bitcoin mining, with industry figures arguing against Kerrisdale’s claims of environmental harm and financial instability.
Amidst the ongoing debate, research has shown that Bitcoin mining can have positive economic impacts, creating jobs and promoting green energy initiatives. Despite facing criticism, Bitcoin continues to thrive, with its price currently hovering around $70,700 after a slight decline. The cryptocurrency’s recent surge has surpassed the $70,000 mark, further solidifying its position as a leading digital asset in the market.