According to JPMorgan, the acquisition will make Riot the second largest Bitcoin mining capacity among registered U.S. miners. Additionally, it will assess underdeveloped energy assets, as noted in the report.
The acquisition of Bitcoin miner Block Mining by Riot Platform (RIOT) is logical, as it diversifies the company’s energy supply and increases its capacity to more than 2 gigawatts (GW), according to a research report by JPMorgan (JPM) published on Wednesday.
Following the acquisition, Riot will become the second largest Bitcoin mining capacity in the U.S., while also assessing “unused energy assets,” analysts Reginald Smith and Charles Pierce note.
However, this statement is surprising due to the potential expansion of Riot’s office in Corsicana, Texas, highlighted in the report.
The acquisition of Block Mining is not the only recent merger and acquisition attempt by the company. Riot recently withdrew an offer to purchase Bitfarms (BITF) and plans to review the target company’s board of directors before making further moves.
JPMorgan notes that the mining deal will add 1 exahash per second (EH/s) to Riot’s hashrate, a measure of computing power, and could reach 16 EH/s by the end of 2025, despite increasing industry competition and mining difficulties.
The bank has an “overweight” rating on Riot shares with a price target of $12. Riot shares traded 0.5% higher at $11.65 in early trading on Wednesday.
In a May report, brokerage firm Bernstein stated that Riot is best positioned for consolidating the Bitcoin mining sector.
