In A Twist of Fate, Bitcoin Hosting and Mining Companies Could Actually Benefit From Low Prices

Bitcoin is trading at a near 40% discount from its highs. While the current dip we’re experiencing may have priced some at-home miners out of the market, hosting and mining companies have begun scaling their business.


While it took only 12 years for 90% of the Bitcoin supply to me mined-out, experts believe it will take another 18 years or more for the final 10% to dry up. Because of this, and the lower Bitcoin price, hosting and mining companies have begun to coalesce market share.

While the stocks of many hosting and mining companies have fallen along with the price of Bitcoin, lower Bitcoin prices could actually be a benefit to miners, and their stocks, in the long-term.

Jonathan Peterson, director and analyst at Jeffries said, “A slower growth trajectory for BTC price should encourage fewer new entrants to the network than if BTC’s price were to rise rapidly, allowing existing mining operators to grow their market share more quickly as they deploy additional ASICs.”

Last year, as Bitcoin rose to $69,000, many small-scale and at-home miners entered the space. However, at current prices near $40,000 to $45,000, these entrants may not be able to mine at a profit, as energy costs outstrip coin value.

This creates an enormous opportunity for miners and mine hosting companies, especially those who generate revenue based on energy spreads.

ISW Holdings (OTC: ISWH), for example, is a fast-growing hosting company that generates a majority of its revenue from the energy spread, rather than the price of Bitcoin.

While the company does mine its own Bitcoin, price fluctuations have only a minor effect on overall revenue generation. The larger the company scales, the more revenue it could generate, regardless of the price of Bitcoin.

As more large-scale miners come online, and smaller ones and home-miners shut off, hosting companies like ISW may be among the biggest winners.

Read more on why Bitcoin hosting and mining companies could benefit from lower prices, HERE.