Bernstein Identifies $20B Opportunity in Mining Chips and Hardware

Analysts from Bernstein believe there is a substantial opportunity within the U.S. mining sector, projecting a potential revenue of $20 billion from mining chips and hardware over the next five years.

Traditionally, this market has been primarily controlled by Chinese firms, particularly Bitmain, which commands over 80% of the market share. However, the rise of U.S.-based companies such as Block and Auradine presents an opportunity to diversify the mining supply chain.

Bernstein identifies several advantages for U.S. Bitcoin miners due to this shift, including enhanced fleet efficiency, decreased capital expenses due to lower chip prices, and the opportunity to repurpose power capacity for artificial intelligence and high-performance computing applications.

The ongoing U.S. election season and former President Trump’s promotion of “Make Bitcoin in America” could further bolster this diversification effort, according to Bernstein’s analysts.

The report outlines the progression of Bitcoin mining chips from CPUs and GPUs to ASICs, examines the current competitive landscape dominated by Chinese firms, and underscores the benefits of new entrants from the U.S. These advantages include innovation through open-source software and custom solutions, as well as closer collaborations with domestic miners to optimize fleet efficiency.

Bernstein has maintained its Outperform ratings on several companies, anticipating that they will benefit from reduced chip prices and heightened competition in the mining hardware space.