Bernstein: Abbott's Texas Grid Moratorium Poses Minimal Threat to Bitcoin Mining Operations
According to Bernstein analysts' Tuesday client briefing, the majority of Bitcoin (BTC) mining companies with Texas operations are expected to remain largely unaffected by the moratorium on new data center connections that Governor Greg Abbott announced on Monday.
Cryptocurrency mining facilities operating throughout Texas are unlikely to face significant consequences from Governor Greg Abbott's moratorium directive that halts approval for new data center projects seeking connection to the state's electrical grid, according to a Tuesday analysis from Bernstein analysts.
On Monday, Abbott issued orders to both the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT), mandating a comprehensive audit of every data center currently requesting connection to the state's power infrastructure. No specific timeline was established for completing the audit, which follows mounting public criticism regarding the rapid expansion of data center development throughout the state, as documented by The Texas Tribune.
In their Tuesday communication with clients, Bernstein analysts explained that since the vast majority of Bitcoin (BTC) mining companies conducting operations in Texas have already secured contracts for previously approved electrical capacity, these existing facilities should not face disruption from the moratorium measures.
However, we believe, this audit throttles speculative data center pipeline and makes genuine sites with development history more valuable. Bitcoin mining sites are favorably placed with the longest gestation, self-funding infra and local community management.
Gautam Chhugani, Bernstein research team
The analysts identified that Texas-based facilities operated by Cipher Digital (CIFR), Core Scientific (CORZ) and CleanSpark (CLSK) may face the greatest vulnerability to emerging public resistance against data center proliferation, especially as they navigate ERCOT's regulatory process required to transform their planned assets into approved grid-connected electrical capacity.
We believe with increasing political opposition to new data center projects and fresh capacity being throttled by moratoriums/state directives, the approved MWs become more valuable.
The research team drew attention to IREN's (IREN) Texas mining facilities, which have obtained complete ERCOT grid approval, alongside the operations maintained by Riot Platforms (RIOT), which also carry full approval status.
Based on Yahoo Finance data, CIFR stock experienced a decline exceeding 7% during Tuesday's premarket trading session. The mining company had released its second-quarter financial results earlier that same Tuesday, revealing a loss of $0.65 per diluted share, representing a deterioration compared to the previous year's loss of $0.12 per diluted share.