US Bitcoin miners have come under fire from Kerrisdale Capital, who have labeled them as “snake oil salesmen.” In a series of tweets on June 5, Kerrisdale accused mining companies of destroying investor capital and harming the environment, with Riot Platforms being a primary target.
CEO Sahm Adrangi highlighted the unprofitability of Bitcoin mining operations, pointing out that Riot issued $41 million in shares in the first four months of 2024, resulting in an 18% stock dilution. Adrangi concluded that this indicated a failing business model.
In response, Riot Platforms refuted Kerrisdale’s claims, stating that they disagreed with the characterization of the Bitcoin mining industry and Riot itself. They expressed confidence in their growth plans and financial performance, dismissing the report’s errors.
Despite the criticism, William Foxley of The Mining Pod offered a different perspective, emphasizing the bullish outlook for U.S. Bitcoin mining, especially with political support. He noted the favorable conditions in states like Texas and Tennessee for miners.
The Kerrisdale report comes at a time of increased regulatory scrutiny and public backlash against Bitcoin miners in Texas. Adrangi highlighted that Texas energy policies favoring Bitcoin miners are being reviewed, with recent decisions against tax reductions for mining projects.
While Kerrisdale has continued its efforts by reaching out to Texas state officials to deny Riot’s future tax abatement requests, the stock price initially dropped by 8.9% on June 5 but has since stabilized, indicating a mixed reception from the market towards Kerrisdale’s findings.