According to a number of mining metrics, miners are not only holding hard but also dramatically increasing their hash rate.
Bitcoin (BTC) miners are holding more and more coins as they “relentlessly expand” their operations in 2022.
A report from Arcane Research indicates that publicly traded Bitcoin miners are “constantly looking for expansion opportunities,” as they plan to grow their hash rate faster than the entire network by 2022.
Nearly forty-five percent of the global hash rate comes from North American mining companies, according to the latest figures from the Cambridge Bitcoin Electricity Consumption Index. With the anticipated massive increases in target hash rate among publicly traded Bitcoin miners, it is “likely to rise.”
The Experts’ Opinions
Jaran Mellerud, an analyst at Arcane Research, told Cointelegraph that “most publicly traded miners pursue a hodl strategy, doing their best to keep as much of their mined Bitcoins as possible.” He adds that, “this hodl strategy allows them to serve as Bitcoin investment vehicles for investors who want to own Bitcoin indirectly through an investment structure.”
On the other hand, Whit Gibbs, founder and CEO of Compass Mining, explained to Cointelegraph that, “public mining companies definitely have an advantage when it comes to holding Bitcoin because they have access to the capital markets.”
Gibbs added that, “They don’t need to liquidate their Bitcoins to buy more equipment, increase their operating space, etc. They can go to the capital markets and get that money to keep expanding. So they are able to hold large positions in Bitcoin.”
Some of the biggest miners own huge amounts of Bitcoin, adds Gibbs, “it’s crazy how much some of them own.” As published on BitcoinTreasuries, the Bitcoin mining company Marathon owns the third-largest amount of Bitcoin among companies worldwide, just behind Tesla and MicroStrategy.
Since January 2021, miners’ reserves have been steadily increasing, reflecting their “hodl” strategy. Gibbs suggests that publicly traded Bitcoin mining companies are “taking a more bullish approach to Bitcoin.” He further states that, “companies are looking at Bitcoin on their balance sheet as a way to boost their market valuations.”
Mellerud also understands that Bitcoin mining stocks are becoming increasingly popular in traditional financial markets. “The demand for Bitcoin investment vehicles is high, especially in the US, as the Bitcoin ETF market is immature.” The Bitcoin exchange-traded fund (ETF) saga is an Achilles heel for the network, as there has been a rejection of successive Bitcoin ETF applications.
To sum up, as market interest in Bitcoin miners grows, Mellerud summarizes why the mining business model is attractive and effective. He does so by echoing Gibb’s viewpoints, “Miners are some of the biggest Bitcoin bulls out there, using the highly developed equity and debt markets in the United States to raise money to pay for their expansions and operating expenses, allowing them to keep the Bitcoins they mine.”
Bitcoin miner Hut 8, for example, recently posted record revenue, seeing a 100% increase in its BTC holdings. This year may not be the right time for bulls, but it is certainly a good time to publicly mine the orange coin.
By Audy Castaneda
