“In 5 Years, Bitcoin Mining Will Be a Thing of the Past,” Predicts Founder of Major Company, Explains the Reason
Sahm Adrangi, the visionary founder of Kerrisdale Capital, boldly declared the impending demise of Bitcoin mining within the next five years. In a recent interview, Adrangi shed light on the firm’s perspective, labeling Bitcoin mining as one of the most irrational business models encountered in his extensive 15-year history of short selling.
Adrangi criticized the industry for its lack of significant barriers to entry, which allows companies worldwide to easily acquire ASIC miners from China, establish operations in regions with lower electricity costs, and outcompete U.S.-based miners. He highlighted the troubling trend of American Bitcoin miners struggling to turn a profit and resorting to issuing more shares to sustain their operations, dubbing the entire industry as a “scam.”
While Kerrisdale’s critique was primarily aimed at Riot Platforms, Adrangi revealed plans to publish similar criticisms of other companies in the sector. He emphasized the unsustainable nature of Bitcoin mining, drawing parallels to the industry’s boom and bust cycle of 2017-2018, where CEOs resorted to questionable practices to prop up unsustainable business models.
In response, Riot Platforms vehemently refuted Kerrisdale’s assessment of the Bitcoin mining industry and the findings of their report, expressing confidence in their ambitious growth plans for 2024 and their ability to deliver strong financial results.
However, Adrangi dismissed Riot’s growth projections as mere shareholder dilution, citing an 18% dilution rate this year alone. He predicted further dilution as the company continues its heavy investment in capital expenditures without generating proportional returns.
Adrangi also raised concerns about the environmental impact of Bitcoin mining, highlighting its wasteful and harmful nature. He pointed out that countries like China have expelled Bitcoin miners due to their environmental footprint and questioned the wisdom of allowing such operations within U.S. borders.
In conclusion, Adrangi’s insights shed light on the precarious future of Bitcoin mining, urging investors to exercise caution in this volatile industry.