Founder of Kerrisdale Capital Predicts Bitcoin Mining Will Be Extinct in 5 Years
During an interview, Sahm Adrangi, the founder and Chief Investment Officer of Kerrisdale Capital, shared his bold prediction that the Bitcoin mining industry will cease to exist within the next five years. Adrangi criticized Bitcoin mining as one of the most nonsensical business models he has encountered in his 15-year history of short selling.
He pointed out the ease of entry into the industry, with companies worldwide purchasing ASIC miners from China, setting up operations in areas with cheaper electricity, and undercutting US miners. Adrangi highlighted the lack of profitability among US-based Bitcoin miners, who rely on issuing shares to sustain themselves rather than making actual profits.
Specifically targeting Riot Platforms in their report, Kerrisdale plans to criticize other companies in the industry for their unsustainable practices. Adrangi compared the current state of Bitcoin mining to the boom and bust of the industry in 2017-2018, where CEOs resorted to questionable methods to maintain their businesses.
In response, Riot Platforms dismissed Kerrisdale’s claims and expressed confidence in their growth plans for 2024. However, Adrangi viewed these plans as merely diluting shareholders’ shares and criticized the company for further dilution as they invest heavily without generating substantial returns.
Adrangi also raised concerns about the environmental impact of Bitcoin mining, citing its wasteful and harmful nature. He questioned the suitability of Bitcoin mining operations in the US, given countries like China have already expelled miners due to environmental concerns.
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