An analysis of crypto companies by CoinEdition

• The NBER released a paper called “Mining Meets Wall Street”.
• The paper studies 13 crypto companies that are listed on the NASDAQ stock exchange.
• It describes the choice of miners between traditional energy consumption and modern renewable energy.

The National Bureau of Economic Research (NBER), the US private non-profit research organization, released an analysis of 13 publicly traded crypto mining companies listed on the NASDAQ stock exchange, titled “Bitcoin Mining Meets Wall Street”.

In particular, the recently published paper highlighted its main agenda to study the specific strategies adopted by these companies during the relatively “difficult period”, saying:

Our paper studies how external shareholders have valued bitcoin miners, and how the publicly traded mining companies have adapted their strategies in an environment that requires regular shareholder reporting and interaction with Wall Street analysts.

Interestingly, the paper outlined the various possible sources of a company’s advantage in increasing customer demand. The four opportunities shared include the companies’ access to scarce mining equipment, securing relationships with “cheap and reliable energy suppliers”, superior energy skills and accumulating BTC over time.

Meanwhile, Chinese reporter Colin Wu tweeted on his official Wu Blockchain account that the NBER’s paper showed that “the ownership of a crypto mining company can provide a useful channel for risk management in the electric power industry”:

The National Bureau of Economic Research published an article “BITCOIN MINING MEETS WALL STREET” which pointed out that ownership of a crypto mining company can provide a useful channel for risk management in the electric power industry. Read more: https://t.co/C8OEAyRmyM

— Wu Blockchain (@WuBlockchain) February 19, 2023

Significantly, the document focuses on “miners’ relationship with power tools as sources of comparative advantage”. It is said that mining companies have switched to using sustainable or renewable energy, most of them engage in “green” or “environmentally friendly energy use”.

In particular, the paper examined miners’ choices between sustainable energy subject to “irregular fluctuations” and conventional energy sources:

Our paper presents a basic model of a miner’s choice between sustainable energy and conventional sources of electrical power, we identify market conditions where a sustainable miner can be more profitable even when required to curtail operations periodically to accommodate demand increases from other customers.

Furthermore, the research explains the case in detail which includes the model, the database, the overall analysis, the discussions and the final conclusion.

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