Hut 8 CEO Asher Gennot predicts a significant decrease in Bitcoin (BTC) mining firms filing for bankruptcy in the upcoming years compared to 2022. In an interview with Bloomberg on April 3, Gennot attributed the main cause of bankruptcies in 2022 to firms being overleveraged and ill-prepared for escalating energy costs.

He pointed out that the excessive leverage in 2021 led to financial strain for many companies when Bitcoin prices declined and energy expenses surged in 2022. Notable Bitcoin miners like Compute North, Celsius Mining, and Core Scientific filed for bankruptcy during the crypto winter in 2022.

However, Gennot noted that Bitcoin miners have since shifted towards relying on less leverage and securing higher volumes of debt-free capital from equity markets to expand their operations. He anticipates increased mergers and acquisitions (M&A) activity among smaller-scale Bitcoin miners, which he believes will lead to a decrease in bankruptcy rates.

Gennot suggested that for a significant amount of M&A activity or distress opportunities to arise, Bitcoin would likely need to retrace to $30,000 or $40,000. With the Bitcoin halving scheduled for April 20, which will reduce miner rewards, Gennot emphasized that investors will favor large-scale operators with the lowest marginal production costs.

He highlighted his own strategic move in December, where he founded US Bitcoin Corp (USBTC) and merged it with Hut 8 Mining Corp's operations in an all-stock merger, resulting in the formation of Hut 8 Corp in Miami, Florida. Hut 8 Corp currently holds over 9,100 Bitcoin, valued at $600 million.

With Bitcoin priced at $66,000 and the halving event approaching in 17 days, Gennot referenced historical trends indicating that Bitcoin typically sets new all-time highs approximately 6-12 months after the halving event. However, Bitcoin recently surpassed its previous all-time high price of $68,990 on March 5, deviating from this trend. Some industry experts attribute Bitcoin's unusual price action in recent months to the launch of spot Bitcoin exchange-traded funds in the United States.