Riot Platforms Inc (NASDAQ: RIOT) reduced its stake in rival Bitcoin mining firm Bitfarms Ltd (NASDAQ: BITF) to 14.3 per cent as part of an investment review.
The company sold 1.75 million shares of Bitfarms on Monday for approximately $1.58 million following an unsuccessful hostile takeover bid earlier this year.
The hostile takeover bid became public in May 2024. Riot offered to buy Bitfarms for $2.30 per share. Bitfarms swiftly rejected the offer. Riot abandoned the approach the following month.
Additionally, Riot kept buying Bitfarms shares to pressure the board to engage. Bitfarms responded by adopting a shareholder rights plan, or “poison pill.” The plan aimed to block Riot from acquiring the company.
Riot emphasized that it remains committed to reassessing its position in Bitfarms as conditions evolve. These factors include potential talks with Bitfarms’ management, the company’s strategic direction, and broader market conditions. Additionally, Riot said it may raise or reduce its holdings in the future depending on these considerations.
The conflict between Riot and Bitfarms escalated in early 2024 after Riot criticized Bitfarms’ corporate governance and board leadership. Riot expressed frustration over what it described as a lack of transparency and poor strategic planning by Bitfarms’ board. In particular, Riot objected to the decision-making process that led to the ousting of Bitfarms’ interim CEO, Nicolas Bonta, who was also the company’s chairman. Riot argued that the leadership instability harmed shareholder confidence and value.
Also, Riot accused the board of entrenching itself by resisting engagement with shareholders and refusing to consider consolidation opportunities. In response, Bitfarms defended its independence and said Riot’s actions threatened to disrupt its long-term strategy.
Read more: Synaptogenix pumps $100m into artificial intelligence token
Read more: Hive Digital levels up Bitcoin mining by passing the 10 exahash per second mark
Post-halving consolidation has been heavy
The Bitcoin mining industry has entered a new wave of consolidation, driven by the April 2024 halving and tightening profit margins.
Furthermore, larger players have moved quickly to acquire rivals, aiming to secure low-cost power and greater operational scale. Companies like CleanSpark Inc (NASDAQ: CLSK), Marathon Digital Holdings (NASDAQ: MARA), Iris Energy Limited (NASDAQ: IREN), and Riot have expanded aggressively. Meanwhile, smaller miners have struggled to remain competitive, especially those with less efficient infrastructure or limited access to capital. Therefore, many have become acquisition targets.
Bitfarms recently acquired Stronghold Digital Mining, positioning itself defensively in the face of Riot’s hostile takeover attempt. Conversely, Riot launched its bid for Bitfarms to boost its hashrate and influence industry direction. A successful deal would have cemented Riot’s position one of the largest public miners in North America.
Further, consolidation enables miners to increase efficiency, weather volatile Bitcoin prices, and respond to regulatory scrutiny with stronger balance sheets.
Also, institutional investors have shown growing interest in large, well-capitalized miners. This shift supports more mergers and roll-ups. In this climate, Riot’s attempt to take over Bitfarms reflects a broader trend: scale and efficiency are now critical for survival in the post-halving mining landscape.
.
