US Bitcoin Mining Hardware Revolution: A $20B Opportunity Challenging China's Dominance

New US Bitcoin Mining Hardware Creates $20B Opportunity, Could Disrupt China's Mining Dominance: Bernstein - Canaan (NASDAQ:CAN)

Growth in AI GPU chips and new U.S. competitors are leading to historically low chip prices, benefiting U.S. miners. A new report estimates a $20 billion revenue opportunity in Bitcoin BTC/USD mining chips and hardware over the next five years. What HappenedL The introduction of new U.S.-based players, such as Block and Auradine, is poised to diversify the supply chain and enhance competition, potentially benefiting U.S.-based miners with improved efficiency and reduced costs, according to Bernstein. Historically, companies like Bitmain, MicroBT and Canaan CAN have controlled the majority of the Bitcoin mining hardware market. Bitmain, for instance, commands over 80% of the market share. These companies design ASIC chips and assemble them into mining rigs, predominantly using advanced fabrication facilities like TSMC and Samsung to mass-produce these chips. Bitmain also operates an extensive ecosystem of after-sales services and one of the largest mining pools, AntPool. However, the launch of new mining chips in the U.S. by companies such as Block and Auradine marks a pivotal shift. "The mining chips and hardware market has been historically dominated by China-based companies," the Bernstein report notes, "but the launch of new mining chips in the U.S. presents an opportunity to diversify the mining supply chain." Block, in particular, has partnered with Core Scientific CORZ to develop advanced 3nm mining ASICs. These chips are expected to offer significant improvements in energy efficiency and computational power compared to the 5nm chips used by current market leaders like Bitmain. Also Read: Donald Trump's Overtures Mean The Bitcoin Price May Be Tied To The Outcome Of 2024 Election: Jefferies "The agreement between CORZ and Block focuses on Block's 3nm mining ASICs, developed by its Proto team," states the report. This collaboration aims to build a customized mining system that integrates software development kits (SDKs) alongside the hardware . Auradine, backed by Marathon MARA, is another new entrant shipping its AT1500 Teraflux miners, which are designed using 3nm ASIC chips with an expected energy efficiency of 14J/TH. Why It Matters: This new wave of competition is expected to drive innovation and provide U.S. miners with more options for fleet upgrades, ultimately reducing the dominance of Chinese manufacturers. The report highlights two key tailwinds for U.S. miners: the growth of AI GPU chips has decreased the bargaining power of rig manufacturers, leading to historically low chip prices, and the emergence of U.S.-based competitors in mining chips promises to diversify the supply chain further. "We believe any new competition in the Bitcoin mining chips/equipment is good for Bitcoin mining operator economics, by keeping chip/equipment prices low," Bernstein analysts state. As the market evolves, the report underscores the potential for enhanced fleet efficiency and lower capital expenditures for miners. With the added push from political figures advocating for "Make Bitcoin in America," this shift could signify a robust future for the Bitcoin mining hardware industry in the United States. What's Next: As the Bitcoin mining hardware landscape continues to evolve, industry leaders and emerging players will have the opportunity to discuss these transformative developments at Benzinga's Future of Digital Assets event on Nov. 19. Read Next: Bitcoin Drops Below $67,000: What Is Going On With Bitcoin, Ethereum ETFs? Image: Pixabay Market News and Data brought to you by Benzinga APIs

'Make Bitcoin in America': Bernstein sees $20B mining chips & hardware opportunity By Investing.com

Bernstein analysts see a significant opportunity in the U.S. Bitcoin mining sector, estimating a $20 billion revenue potential for mining chips and hardware over the next five years. The firm notes that historically, this market has been dominated by Chinese companies, especially Bitmain, which holds over 80% market share. However, they state that the emergence of U.S.-based companies like Block and Auradine introduces a chance to diversify the mining supply chain. Bernstein highlights several benefits of this shift for U.S. Bitcoin miners, including improved fleet efficiency, reduced capital expenditures due to lower chip prices, and the potential to repurpose power capacity for AI and high-performance computing (HPC) opportunities. In light of the U.S. election season and former President Trump's advocacy for "Make Bitcoin in America," this diversification could provide a significant boost to the sector, according to the firm's analysts. The report outlines the evolution of Bitcoin mining chips from CPUs and GPUs to ASICs, details the current competitive landscape dominated by Chinese players, and emphasizes the advantages of new U.S. entrants. These include innovation through open-source and customizable software and closer partnerships with U.S.-based miners to enhance fleet efficiency. Bernstein maintained its Outperform ratings on RIOT, CLSK, IREN, and CORZ in the note, expecting them to benefit from lower chip prices and increased competition in the mining hardware market.