Key facts
- Texas Governor Greg Abbott has placed a moratorium on new data center projects connected to the ERCOT grid.
- The moratorium is in place pending an audit of data center applications.
- Bernstein analysts believe Bitcoin miners with existing, approved electricity contracts in Texas will not be affected.
- The research suggests the moratorium will reduce speculative data center pipelines and increase the value of approved capacity.
- Cipher Digital (CIFR) shares declined over 7% in premarket trading.
Texas Governor Greg Abbott has directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT) to audit all data centers seeking to connect to the state’s power grid. This moratorium comes amid increasing public backlash to the rapid build-out of data centers across the state.
Bernstein analysts stated that this move is unlikely to impact Bitcoin miners that already have approved electricity contracts. The research team, led by Gautam Chhugani, noted that the audit is expected to throttle speculative data center pipelines, making genuine sites with development history more valuable. They highlighted that Bitcoin mining sites often have long gestation periods, self-funded infrastructure, and local community management.
The analysts indicated that miners like Cipher Digital (CIFR), Core Scientific (CORZ), and CleanSpark (CLSK) could face more significant future opposition, particularly during ERCOT’s approval process for converting pipeline assets into grid-connected power. Conversely, IREN (IREN) and Riot Platforms (RIOT) have fully ERCOT grid-approved operations.
Cipher Digital shares fell more than 7% in premarket trading on Tuesday. The company also reported a wider loss for the second quarter.