A movement is on in bitcoin mining among publicly traded companies that heralds the biggest change since the invention of asics back in 2013.
“After considerable planning, implementation of internal controls, counter-party risk review, and custody arrangements, in early January, Bitfarms has commenced a Bitcoin Pilot Retention Program.
Under this Program, for the first time, the Company is no longer selling all the Bitcoins earned… Since the start of this Program, Bitfarms has added over 150 Bitcoin to its balance sheet.”
So says one publicly traded bitcoin miner, Bitfarms (TSXV: BITF), which operates in Quebec, Canada.
Their 150 bitcoin, $7 million, is a small amount but they mine about 180 bitcoins a month, all of which will now be retained.
Their expansion will instead be funded by stock investors who buy their shares, with the company already having two private placements last month for C$40 million.
Their expansion plans include “a non-binding memorandum of understanding with a private energy producer to secure exclusive use of up to 200 MW of electricity in South America at an average price of US 2 cents per kilowatt hour (“kWh”).”
That’s cheap as energy costs in China are usually taken to be at five cent, with Bitfarm valued at C$390 million in market cap at a yearly revenue of about $100 million based on the current bitcoin price and hashrate.
A much bigger miner, Marathon (Nasdaq:MARA), has taken the further step of buying bitcoin, but it’s not clear whether they have a policy of holding the bitcoin they mine, which would be a completely different game.
Smaller miner Digihost Technology Inc. (TSXV:DGHI) has held to their coins which now total 183.7 BTC, with other crypto related publicly traded companies seemingly joining them.
BIGG Digital Assets Inc. (OTCQB: BBKCF) which owns Netcoin, this being a traditional crypto exchange rather than a coin, announced they have acquired 24.3 additional Bitcoins that are now “part of BIGG’s long term treasury holdings.”
This company further announced they intend to buy another C$5 million worth of bitcoin “over the next 5 weeks, dollar cost averaging the purchases.”
Smaller miners like CryptoStar Corp. (TSXV: CSTR) may have to follow suit. They’re tiny with a market cap of just $25 million but they seem to focus on ethereum mining and have seemingly secured a purchase of “85,680 MH/s Hashrate using the latest generation GPU miners which is expected to contribute 142.80 ETH or USD$145,473.22 per month.”
If they hold this eth, the sum is small so it might not make a significant difference in the market, but theoretically there can potentially be a huge advantage.
That’s because if miners do not have to sell, and considering this is a deflationary asset, then you’re multiplying your revenue and profits.