Texas electric grid moratorium won’t have big impact on BTC miners: Bernstein

Texas Governor Greg Abbott has imposed a moratorium on the approval of ERCOT-linked data centers, pending an audit, according to Monday's announcement. However, analysts from Bernstein believe that this moratorium will not have a significant impact on Bitcoin (BTC) miners in Texas. The reason being that most BTC miners operating in Texas are already under contract for approved electric capacity, and thus, their operations are unlikely to be affected by the moratorium.

The audit, which will be conducted by the Public Utility Commission of Texas and ERCOT, aims to address growing public concerns over the rapid pace of data center development across the state. Bernstein analysts predict that this audit will help throttle the speculative data center pipeline, making genuine sites with development history more valuable. They also mention that Bitcoin mining sites are strategically located, with long gestation periods, self-funding infrastructure, and strong local community management.

Among the miners most exposed to future public opposition to data center expansion are Cipher Digital (CIFR), Core Scientific (CORZ), and CleanSpark (CLSK). However, the researchers believe that the political backlash to new data center projects and the throttling of fresh capacity by moratoriums/state directives will make the approved megawatts (MW) more valuable. This is evident in the case of IREN, which is fully ERCOT grid approved, as well as Riot Platforms (RIOT).

Shares of CIFR were down more than 7% in Tuesday's premarket trading following the announcement of the moratorium. The miner reported a loss of $0.65 per diluted share in Q2, which is significantly higher than last year's loss of $0.12 per diluted share.