Since the Bitcoin halving in April, major Bitcoin miners have chosen one of two strategies: hold on to their mined BTC or leverage artificial intelligence (AI). It's starting. With the BTC halving, the amount mined by miners will be cut in half every four years. This is a deflationary mechanism that also helps maintain the hard cap of 21 million Bitcoins.
Public miners such as MARA Holdings, Riot Platforms, and CleanSpark hold the BTC they mine in hopes of increasing its value over time.
Wolfie Chao, an analyst at research firm TheMinerMag, told Bloomberg:
“By avoiding selling Bitcoin too quickly at a loss, they (miners) can keep potential losses unrealized and profit if a bull market materializes.”
However, a popular strategy among crypto mining stock traders is investing in AI. For example, Core Scientific's stock has nearly quadrupled since announcing a multibillion-dollar deal with AI startup Coreweave. Core Scientific was successfully reorganized and emerged from bankruptcy earlier this year.
At the same time, the stocks of MARA and Riot, which are betting on holding BTC, have fallen 20% and 36%, respectively, this year. Similarly, the stocks of Iris Energy and Bit Digital, which invest in AI, have fared better than BTC holdings.
With miners like MARA and Clean Spark running profitable operations, the strategy of holding BTC seems viable. Moreover, in a market where Bitcoin prices are rising, this strategy seems appropriate.
In fact, as the market rises, Bitcoin miners have started borrowing again and issuing more shares. And companies like MARA are following in MicroStrategy's footsteps and using the funds to buy even more cryptocurrencies.
But Ethan Vera, chief operating officer of Luxor Technology, a bitcoin mining software and services company, issued a warning. he said:
“In an environment where Bitcoin prices rise, this strategy would be very successful, but if Bitcoin prices plummeted it would be disastrous… We would continue to see negative returns, and they would not be able to predict how much the industry is currently doing. It's bad that their management is being done by diluting shareholders and buying newer machinery. ”
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