Kerrisdale Capital "Bitcoin mining sector won't be around in 5 years"

So...

I finally read their report here:
https://www.kerrisdalecap.com/wp-content/uploads/2024/06/RIOT-Kerrisdale.pdf

Looks like they even quoted a time-line for the Bitcoin miner implosion, depending on Bitcoin's range:


The public market guys, some of them are playing the momentum game and others have no idea what they’re investing in. When you watch the Q2 numbers come out in July and if we stay at kind of BTC $50-$70k range the music is going to end here... People are going to start to sell out of these stocks and realize that they [publicly listed miners] made the wrong investment decision over the years, prioritizing growth over operational efficiencies.”

— Senior executive, leading provider of products and services to bitcoin mining industry
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Great, now everyone knows when the bust is going to happen. Bet the house and YOLO!

Incidentally, they shorted by purchasing PUTs on RIOT. Now I know who was the other person on the end of my short-PUT RIOT contracts. And more interesting, my ITM short-puts have profited quite well, despite still being ITM at the moment :fistbump:

They certainly could have played this much safer by loading up on calls or shorting PUTs on BitFarms, considering they talked about so much of that miner in that paper. They even knew about the hostile take-over. Naturally, BitFarms is rallying hard...

So I've done very well on BitFarms. My stocks are up a lot, and my short-PUTs are also all profitable again.:thumbsup: Strange that Kerrisdale missed this obvious play. :wtf:

Other fun-fact. The paper rants and rants regarding the Corsicana site. Yet doesn't seem to 'get it'. Corsicana is one of the only sites left that miners can use 1GW of power. This essentially gives RIOT an impermeable 'moat'. But... unless you are a value-investor, you may not notice these things :banghead:
 
The_Krakenite said:
So...

I finally read their report here:
https://www.kerrisdalecap.com/wp-content/uploads/2024/06/RIOT-Kerrisdale.pdf

Looks like they even quoted a time-line for the Bitcoin miner implosion, depending on Bitcoin's range:




Great, now everyone knows when the bust is going to happen. Bet the house and YOLO!

Incidentally, they shorted by purchasing PUTs on RIOT. Now I know who was the other person on the end of my short-PUT RIOT contracts. And more interesting, my ITM short-puts have profited quite well, despite still being ITM at the moment :fistbump:

They certainly could have played this much safer by loading up on calls or shorting PUTs on BitFarms, considering they talked about so much of that miner in that paper. They even knew about the hostile take-over. Naturally, BitFarms is rallying hard...

So I've done very well on BitFarms. My stocks are up a lot, and my short-PUTs are also all profitable again.:thumbsup: Strange that Kerrisdale missed this obvious play. :wtf:

Other fun-fact. The paper rants and rants regarding the Corsicana site. Yet doesn't seem to 'get it'. Corsicana is one of the only sites left that miners can use 1GW of power. This essentially gives RIOT an impermeable 'moat'. But... unless you are a value-investor, you may not notice these things :banghead:
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On "What Bitcoin Did," they recently interviewed IREN, a miner who said its cost to mine one bitcoin is $17K. Sounds like a pretty decent profit margin at current bitcoin prices.
 
ph1l said:
I might not be an expert on power plants, but I know how to use electricity to easily find out they can be built to not be running at full capacity all the time (load following power plants) or not be running at all sometimes (peaking power plants).


The problem with "you pay that miner" is you is me and all the other victims who pay more for electricity because of bitcoin mining. It would be "so simple and effective" to not pay bitcoin miners for not mining at the expense of others or better yet have them pay extra for the greater good of society.
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You are welcome to lobby to kick the miners out of your city. But when they leave, your rates will actually go up.

In places like Texas, the production isn't consistent because of all the wind and solar. So its not simply turning off a power plant, which would actually take hours to do. Wind can stop blowing in one second and drastically cut output in no time. You as a customer would of course complain if you lost power. So then they have to build another plant to always be running, sine you don't want a blackout, just in case the wind stops. But this extra plant will cause your rates to skyrocket. So you complain again.

What the power company needs in a buyer who always needs electricity, so they can make use of this extra plant, but be willing to shut down in case the wind stops blowing somewhere. That money that the bitcoin mining firm gets is compensation for them not making money, but ensuring that you have power.

If you don't want to pay more for your electricity, just be prepared to deal with blackouts. But most customers will not be very happy, and most will choose to pay more money to always have it.
 
Finished going through their short paper on MSTR now.

Looks like it's a tad misleading at first. They are not really short MSTR, and admit it has positive cash-flow. They are simply short what they believe is an over-sized premium on the shares in contrast to spot-BTC. So they are in a more safe pairs-trade; long BTC and short MSTR.

They posted publicly on March 28...

Screenshot 2024-06-16 at 10.38.04 AM.png
 
NoahA said:
If you actually did your research and understood the issue properly, you would see that this is a huge benefit to the Texas grid and so many other power companies are looking to copy this as a way to balance their grid. Bitcoin mining operations help make electricity more reliable and cheaper for people like you.
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The_Krakenite said:
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bitcoin mining is so stupid

these miners solve ARBITRARY mathematical equations. THE MORE miners there are plugged in, the harder the equations become to solve. You are wasting energy and polluting the environment for no benefit.

More miners != more security. Nothing gets better with more miners.

These miners concentrate into large facilities and then there is even more centralization into like 5 mining pools(where miners cooperate for efficiency). Those few pools mine 90% of blocks.

Bitcoin decentralization is a myth.

At surface level Bitcoin looks like a good idea, but as soon as you dig deeper into it you realize how retarded it really is.


And the core idea upon which Bitcoin was built was to NOT TRUST any entity. YET we are trusting a single offshore company (Tether) with no regulatory oversight or financial audits.

The "store of value" and "digital gold" aspect depends entirely on Tether to be legit, but we have no audits, no proof of their backing.

The entire thing is basically a geniously conceived ponzi scheme. Tether prints fake dollars out of nothing. People think these IOUs are worth $1 and they use them to prop the market.

As price goes up more and more people start believing into Bitcoin, adding fuel to the fire.

Wall street loves to pump&dump useless garbage, so they approve the ETFs and now your average mom&pop can buy into a ponzi scheme, presented as "revoutionary digital gold".
 
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