![Bitcoin miners still bullish despite toughest bear market yet — Hut8, Foundry, Braiins Bitcoin miners still bullish despite toughest bear market yet — Hut8, Foundry, Braiins](https://i0.wp.com/images.cointelegraph.com/images/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDcvYWVmZTFlNjMtODhjYy00MTQ5LTg2ZjYtZDM5MDc0MTJlMGI2LmpwZw==.jpg?fit=%2C&ssl=1)
Bitcoin (BTC) miners have been struggling over the past year with an all-time high amount of BTC being sent to centralized exchanges to cover their 2023 costs.
As previously reported by Cointelegraph, the bitcoin mining ecosystem has had an eventful year. Thanks to the BTC price rally and the hype surrounding the BRC-20 token, the industry earned a staggering $184 million in transaction fees in Q2 2023, surpassing the total transaction volume in 2022.
The stocks of well-known mining companies have also seen impressive gains in 2023, far exceeding Bitcoin’s market capitalization performance. Since the beginning of 2023, the market capitalization of the top nine listed Bitcoin mining companies has increased by 257%.
Meanwhile, miners have been forced to keep selling mined bitcoin to cover operating costs as the industry continues to try to emerge from a prolonged bear market. In June 2023, miners sent $128 million worth of Bitcoin for transactions, a record high, and industry experts emphasized that miners tend to send BTC for transactions to cash out, cover costs, and lock in profits.
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A market report from Bitfinex suggests that mining companies are looking to reduce risk by moving BTC to exchanges. Analysts believe that miners are engaging in hedging activities in the derivatives market, placing off-exchange orders or moving funds through exchanges for other reasons.
Cointelegraph reached out to some prominent mining companies to find out about the current mining environment and the latest trends in the industry.
Hut8 CEO Jaime Leverton highlighted the company’s efforts to complete the merger with USBTC, which hindered its ability to raise funds through a market offering. After announcing the impending merger, Leverton said that Hut8’s financial strategy includes selling options on its Bitcoin holdings and newly minted BTC to cover its operating costs:
“We plan to revisit our financial strategy after the merger is complete. As a result, we were the last major bitcoin miner to sell some production earlier this year.
Leverton added that Hut8 still holds more than 9,100 BTC ($271 million), and that the firm remains “bullish on Bitcoin and HODLing,” as it maintains one of the largest self-mined Bitcoin reserves of a public company.
Cabin 8 disclosed In its most recent production and operations update, the company has sold 217 bitcoins mined in May and June for $7.9 million.
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Charles Chong, senior manager of business development at Foundry, also weighed in on the issue, while the company declined to comment on whether it held any BTC in 2023.
As Chong explained, in past bull market conditions, miners were operating at 60-80% production margins, with sufficient external capital allowing many operators to hold the BTC they mined.
“However, we are in a different era now, where external capital is scarce and profit margins are only 15-30%, forcing miners to liquidate Bitcoin to cover operating costs.”
Chong also added that it is difficult to compare the current market conditions with the bear market after the market peaked in 2017 and 2021. He said bitcoin mining is cyclical as miners “overinvest” in ASIC mining rigs during boom times.
Notably, Bitcoin mining difficulty has also hit a recent all-time high, suggesting that the network is at its most robust. Chong explained that in 2023, new, more efficient mining equipment capable of providing higher computing power will continue to be released on the market, forcing miners to update their equipment in order to continue to produce bitcoins for profit.
“That said, the total energy use of the network is also growing slowly, albeit at a slower pace, suggesting increasing investment in network security.”
A spokesperson for Braiins Mining told Cointelegraph that the continued increase in difficulty is a result of increased hashrate, suggesting that industry players see potential future upside in BTC prices:
“To us, this shows that miners are still able to deploy machines profitably in the current environment and are bullish on Bitcoin’s future price appreciation.”
Current market conditions have also led to the closure of some high-profile mining companies, including Core Scientific, which filed for Chapter 11 bankruptcy in June 2023. The company has successfully raised significant capital to initiate a restructuring plan scheduled for September 2023.
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