Texas Halts Power Approvals...Bernstein: "Existing Coin Miners Like Riot Indirectly Benefit"

▲ Texas, Bitcoin (BTC), Data Center/AI Generated Image

Although Texas has halted approvals for data centers connecting to the power grid, an analysis suggests that the business of Bitcoin (BTC) mining operators who have already secured existing power contracts will not be significantly impacted.

According to cryptocurrency media outlet Cointelegraph on August 4 (local time), Bernstein assessed that Texas's decision to halt approvals for data center power grid connections would have a limited impact on local Bitcoin mining operators. This is because a significant number of mining operators have already secured approved power capacity through contracts.

Texas Governor Greg Abbott has instructed the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT) to audit all data centers that have applied for power grid connections. The audit period has not been set. This measure comes amidst growing public backlash across Texas over the speed of data center construction.

A research team led by Bernstein senior analyst Gautam Chhugani stated, “While the audit will curb speculative data center projects, the value of legitimate sites with a development track record will increase.” They further assessed, “Bitcoin mining sites are in a favorable position, having undergone long development processes, self-sourced infrastructure, and experience in community management.”

Cipher Digital (CIFR), Core Scientific (CORZ), and CleanSpark (CLSK) were identified as companies that would be relatively highly exposed to future opposition against data center expansion. The analysis suggests they could face regulatory impacts during the approval process of converting their planned sites into power capacity connected to the ERCOT grid.

Bernstein explained that as new power supply approvals become restricted, the value of already secured power capacity increases. IREN (IREN) and Riot Platforms (RIOT) Texas mining facilities have both secured ERCOT approvals. Cipher Digital's stock price fell by over 7% in pre-market trading after the announcement that its Q2 net loss per share widened from $0.12 in the same period last year to $0.65.

[Article Key Summary]

-Bernstein analyzed that Texas's halt of data center approvals would have a limited impact on Bitcoin mining operators who have already secured existing power contracts.

-Cipher Digital, Core Scientific, and CleanSpark were identified as companies that could face regulatory impacts during future ERCOT approval processes.

-IREN and Riot Platforms' Texas mining facilities have secured ERCOT power grid connection approvals.

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