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According to this strategy, Bitcoin miner rewards sent to exchanges signal impending selling pressure on Bitcoin prices and may reflect miners’ distress.
Elements of this approach were challenged by various publicly traded Bitcoin miners at the Bitmain World Digital Mining Summit in Hong Kong last week.
Jeff Taylor, executive vice president of core science for data center operations, said:
“Core Scientific is probably the poster child for a HODL strategy. We built a 10,000 Bitcoin vault and pushed it to the top, and then it led to some financial trouble that we’re now trying to get out of. So what we’re doing today is selling our stock every day of Bitcoin produced. I think it goes back to these three things. How and where can costs be reduced, how and where can efficiencies be improved, and what new financial innovations can be brought to finance or power plans to fundamentally to stabilize the profitability of the entire company.”
Panelists Taylor Monning and Will Roberts from CleanSpark and Iris Energy agreed with Core Scientific Executive Vice President Jeff Taylor and mentioned that their respective companies also sell the majority of mined BTC.
Meng Ning said,
“CleanSpark had a very different strategy, so we were very conservative during the bull market, and we were very sad about that. We sold Bitcoin all the way to the top of $60,000, and we were very sad about that. But, I think everyone Have all seen our strategy pay off this year, we have scaled to 9.5 exohash and now we are starting to increase our hodl as you may have seen over the last few months as the Bitcoin price has been much lower. So we’ve taken a more conservative approach in the bull market. Constructing a bear market has been a motto within our company, and I think we’ll continue to expand on that. I think people learned a lot in the last market cycle, and I think the CleanSpark strategy will Used by many other miners.”
Iris Energy co-founder Will Roberts added,
“We’ve sold all our Bitcoin every day since we started mining. I mean, our view is that mining Bitcoin and operating data centers is a very different business model than investing in an asset like Bitcoin. Our business is to create shareholder value, and what we are good at is operating data centers and generating cash flow for investors. Our view is that we can actually generate more value by selling Bitcoin today and earning Bitcoin, and then Coupled with some Bitcoin in the future, we have the opportunity and expansion capabilities to do that or potentially pay out dividends at some stage in the future, whether in cash or Bitcoin.”
Nazar Khan, co-founder of TeraWulf said,
“I think the last bull market seemed like two lifetimes ago. So I think whatever approach we took then is long gone and we’ve made some adjustments and modifications to where we are. And with the others here Some people are like, we’ve been selling every Bitcoin we’ve ever produced, and fundamentally we at TeraWulf think of us as a converter. We use a kilowatt-hour of electricity, run it through an amazing ASIC made by Bitmain, and The hashes are generated on the backend. Every day, how we judge this is how efficient we are in the conversion process. We tell investors that we are converters and measure how efficient we are in the conversion process, which means we Monetize every Bitcoin sold every day.”
related: Bitcoin miners double down on efficiency, renewable energy at World Digital Mining Summit
So, are Bitcoin analysts all wrong?
When asked about the accuracy and methodology of on-chain metrics such as Charles Edward’s Hashband Indicator, Khan quipped:
“I think being an analyst is an extremely difficult job because by definition you can be wrong. Beyond that, I think it’s probably a good metric that historically, historically, When we realize 80% plus profit, there’s no need to sell, you don’t need to monetize every Bitcoin produced. I think most of the companies we see today, given our existing growth plans, That’s true. Our only source of revenue is from profits from mining Bitcoin or raising incremental capital, and the capital markets that we use to grow our business have been tight over the past few years, so I think at least for a publicly listed For miners, looking at their Bitcoin sales strategy is not necessarily a direct indicator of capitulation or distress, but more of how it fits where they are today and their plans for growth tomorrow, and how their capital needs are met.”
The statement from Foundry Vice President Kevin Zhu is also consistent with the views of WDMS publicly listed miners.
“The ideal situation would be to believe that Bitcoin will indeed rise and that our dilemma will go away on its own, but there is no guarantee. The economic incentive for Bitcoin to act alone may not exist, or it may be 6 months or 12 months after the halving. Emerge. In this case, you have to get really creative. How do we deal with block space, how do we raise fees. What other ways are there to subsidize ourselves, to subsidize miners? You also have to be very creative with the Bitcoin that you mine. A critical and strategic approach. Are you hedging? Are you doing covered calls? What is your financial plan? If you were bullish on Bitcoin’s prospects, would you liquidate all your Bitcoins or hold some of them? coins. It requires a lot of layering and modeling, endless models.”
For the full conversation about Bitcoin miners’ shift to renewable energy, the growing synergies between energy producers and Bitcoin miners, and what miners think of the upcoming halving, check out WDMS panel is here.
This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should do their own research when making decisions.
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