Bitcoin Miners and Holders Double Down Despite Bear Market Decline
In the wake of Bitcoin dropping below $20,000 in September, public miners and prominent holders have decided to follow up on their standing strategies.
Publicly traded Bitcoin miner BitFarms has started production at the first of two 50-megawatt (MW) warehouses under development in Argentina, according to a press release. The company’s announcement came as the stock, listed on the Nasdaq, is trading just above $1.20, down nearly half from $2.30 last month.
With the initial startup, adding 10MW of capacity, bringing the company’s total capacity to 176MW, the company reported a milestone hash rate exceeding 4 exahash per second (EH/s). In 10MW increments over the following months, BitFarms CEO Geoff Morphy said he hopes to reach the 50MW target by the end of the year.
“We are proud to start production ahead of schedule at our first 50 MW storage in Rio Cuarto, marking our 10th mine and 4th land now in production,” said Morphy. He added that the company managed to secure attractive electricity prices established last year under an 8-year private power contract for both plants. Despite rising commodity costs in the energy market around the world, Morphy said this would reduce overall energy costs for the portfolio.
Marathon Digital share price
From a peak of nearly $19 on August 10, shares of fellow miner Marathon Digital have since fallen to about $10.50. According to former investment adviser Gary Bourgeault, the company would be wise to hold on to its Bitcoin given the current drop in value. However, he said that if prices remain under pressure, the miner may be forced to sell, but if the price of Bitcoin does not recover, losses may increase to “relevant levels.”
Still, despite these challenges, Bourgeault highlighted that Marathon is rapidly increasing its exahash rate and believes it will reach 23 EH/s near mid-2023, adding that a significant number of miners could make up for some of the current losses. Since Marathon is leveraging the price of Bitcoin, Bourgeault added that a bump could push it higher relative to its peers.
MicroStrategy Holding Bitcoin
Meanwhile, business intelligence firm and prominent Bitcoin holder MicroStrategy has seen its shares fall, both in the past week and since last month. On August 15, MSTR traded around $350, before falling to $250 within 10 days, reaching $210 by September. Despite a pullback to $260, it has since fallen below $200.
In its latest statement on Bitcoin holdings last month, MicroStrategy reported that it last bought Bitcoin on June 28, around 480 for $10 million. This brought the total Bitcoin holdings to 129,699 for a total cost of $3.9756 billion, making the average purchase price of each Bitcoin $30,650. Although co-founder Michale Saylor has stepped down as CEO, the company has stated that it intends to raise more funds to continue pursuing its Bitcoin strategy.
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