Mining Firms Embrace Bitcoin Purchase Strategy Similar to MicroStrategy: JPMorgan Report
Crypto miners are adopting Bitcoin accumulation strategies to enhance profitability after recent market changes, according to JPMorgan.
Key Highlights:
- Crypto miners are now adopting the Bitcoin accumulation strategy pioneered by MicroStrategy as profitability pressures mount, according to a recent JPMorgan report.
- Companies are increasingly turning to debt and equity financing instead of selling off their Bitcoin holdings.
- The introduction of Bitcoin ETFs in the U.S. provides investors with more direct access to Bitcoin than investing in mining stocks.
MicroStrategy (MSTR), founded by Michael Saylor, is not the only major corporate investor in Bitcoin (BTC). JPMorgan (JPM) reported the shift among crypto miners towards an accumulation strategy, driven by profitability challenges caused by the April [reward halving](https://www.coindesk.com/tech/2024/04/20/bitcoin-blockchain-has-fourth-halving-in-15-year-history-in-show-of-monetary-policy-set-by-code) and a [rising network hashrate](https://www.coindesk.com/markets/2024/11/05/bitcoin-mining-difficulty-tops-100t-for-first-time-piling-pressure-on-small-miners).
"This likely prompted miners to hoard or seek further investments into Bitcoin or diversify into AI/HPC businesses," analysts led by Nikolaos Panigirtzoglou noted.
Mining companies, such as MARA Holdings (MARA), are following suit, implementing MicroStrategy’s approach, known as BTC yield. MARA currently holds 35,000 Bitcoin worth approximately $3.5 billion, making it the [second-largest](https://www.coindesk.com/business/2024/12/10/fred-thiel-the-michael-saylor-of-the-bitcoin-mining-industry) publicly traded entity in terms of Bitcoin reserves. Others, like Semler Scientific, have also intensified their Bitcoin acquisitions, now controlling $144 million in the cryptocurrency.
January's launch of spot Bitcoin ETFs has provided institutional investors with a direct method to gain Bitcoin exposure, leading to miner stocks underperforming.
As a result, miners are looking beyond Bitcoin purchases, increasingly using debt and equity offerings to sustain their operations, having raised over $10 billion this year alone, surpassing the previous record of $9.5 billion set in 2021.
Read more: Bitcoin Miners Cipher, CleanSpark and MARA Upgraded at JPMorgan
