Bitcoin mining companies are seeking new investments totaling billions, due to rising energy costs, which are reducing their profit margins.
Due to escalating energy expenses, Bitcoin (BTC) mining operations in the U.S. are amassing massive financial reserves, as the struggle for resources becomes more fierce and Bitcoin’s profitability, post its recent halving, continues to be strained according to the Financial Times.
Companies such as Marathon Digital, Riot Platforms, and CleanSpark have gathered over $3.7 billion since November 2024 through zero or minimal-interest convertible bonds. A large portion of this capital has been used to purchase Bitcoin, bolstering their reserves. Notably, the largest cryptocurrency by market value surpassed the $100,000 threshold.
According to Marathon CEO Fred Thiel, their goal is to acquire as much Bitcoin as possible, and currently, they have close to 45,000 Bitcoins, which is worth more than $4.4 billion.
Nevertheless, miners continue to face substantial hurdles. Energy expenses are escalating, while the Bitcoin hash rate attains new records. To compound their difficulties, the recent halving reduced mining rewards by half, lowering from 6.25 Bitcoins to only 3.125 Bitcoins per block.
According to James Butterfill, head of research at CoinShares, their firm anticipates an extraordinary surge in the Bitcoin mining rate, implying a significant influx of new mining equipment. This influx could leave those with higher production costs at greater risk, should there be a drop in Bitcoin’s price.
Miners (of cryptocurrency) are vying with developers of artificial intelligence for the ability to tap into the power grid. Some businesses, such as Hut 8 and Hive, are adapting their data centers to be rented out to AI companies in order to cut costs. Alternatively, companies like Marathon are broadening their operations to countries that have an excess of energy, such as Kenya and Paraguay.
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2025-01-07 11:37