The Trend of Bitcoin Miners Accumulating Bitcoin
What's the situation? It turns out that Bitcoin miners are also accumulating a large amount of Bitcoin!
Numerous Bitcoin miners are scrambling to buy this digital currency that they are also mining, and are even looking to MicroStrategy as a model.
Bitcoin miners in the United States are amassing large Bitcoin reserves to cope with the decline in profit margins due to increasingly fierce resource competition.
Companies such as Mara Holdings, Riot Platforms, and CleanSpark, taking advantage of the soaring price of Bitcoin (which reached $100,000 last month), have raised more than $3.7 billion from investors since November, specifically for the purchase of Bitcoin. They usually raise funds through zero - coupon or near - zero - coupon convertible bonds.
Their move came after Trump won the election. The incoming US President Trump promised that Bitcoin would be "mined, minted, and produced in the United States."
However, for many, the reason why miners are scrambling to buy the currency they are also mining ultimately boils down to protecting themselves from further financial pressure brought about by high energy costs.
Russell Cann, Chief Development Officer of Core Scientific, said, "It's not as simple as Bitcoin's price going up and everyone being happy. There are still complex challenges in terms of profitability and grid access."
The ambitious plans of miners also include expanding artificial intelligence capacity, which marks a sharp reversal in the industry's prospects. After the Bitcoin mining reward was halved, the industry has been struggling for the past eight months.
Miners compete with each other to verify new transaction blocks in Bitcoin, which makes them play a crucial role in ensuring the security and reliability of the Bitcoin network.
The computer program that runs the Bitcoin network is designed to halve the rewards available to miners every four years. The latest halving occurred in April last year, reducing the rewards miners receive from 900 Bitcoins per day to 450 Bitcoins.
Investment group CoinShares estimates that the average cost of producing one Bitcoin for all listed miners in the United States rose to $55,950 in the third quarter of last year, an increase of 13% from the previous quarter. Including depreciation and stock - based compensation expenses, the average cost of producing one Bitcoin is $106,000. On Tuesday during European trading hours, Bitcoin was trading at approximately $101,700.
James Butterfill, Head of Research at CoinShares, said, "If the price of Bitcoin had not increased, then we would start to see a significant number of miners start to shut down their mining machines or go bankrupt."
But the soaring price of Bitcoin has pushed up an indicator of mining profitability - the hash price, which has increased by 32% since Trump's victory. This glimmer of hope has prompted many miners to return to the capital market to seek new funds.