Krypto mining companies are different when selling Bitcoin

Krypto mining companies are different when selling Bitcoin

is the question that many cryptocurrency mining operations are facing. Hut 8 consistently follows the earlier approach.

SUE Ennis, Vice President of Corporate Development at HUT 8, told Blockworks that the company was not intended to sell its Bitcoins in the foreseeable future.

The Canada-based company has $ 70 million in its balance sheet and an uncorrelated computer business that generates $ 1.6 million sales per month. In contrast to some competitors, she added, HUT 8 has no large outstanding capital obligations for machines from orders that were made during the bull market.

"Last year and until this year we focused on how we can diversify our income and watch a balance sheet -oriented approach if we buy machines and at what price we paid for machines when we were in a situation in which we had to sell this very valuable, finite asset, which we all had to follow when things went sideways," she said.

ennis said that HUT 8 would most likely consider the sale of Bitcoin if the price of the assets jumps far beyond its all-time highs-which indicates bullish long-term estimates of JPMorgan analysts and cathy Wood, CEO from ARK Invest, which reaches $ 150,000 and 500,000 or.

"At this point it might sell a bit, invest it again in the [computing] and web3 page of our business," she said. "But again, at the moment we have no intention and no actual price point that we have on our radar."

The Bitcoin price was around $ 7,700 at 8 a.m., which corresponds to a decline of around 71 % compared to its maximum of almost $ 70,000 last November.

While hut 8 Mining tries to keep his Bitcoin for the foreseeable future and further expand its cloud computing business, other miners sold or plan to sell BTC while the crypto desolation is.

Bitfarms announced last month that it had sold 3,000 BTC within a week. CFO Jeff Lucas found that sales in the current market environment were the best and cost -effective liquidity source.

The Riot Blockchain, based in Texas, started selling part of its monthly Bitcoin production in March. The company sold 300 of the 421 BTC, which it produced in June, and achieved a net proceeds of around $ 6.2 million to contribute to covering the operating and other costs. Riot kept about 6,654 BTC on June 30th.

The company is progressing in its 400 megawatt infrastructure expansion project in its Whhinstone facility in Rockdale, Texas, Fort.

"It is still important to us to have a strong Bitcoin balance, so we didn't sell per se out of the balance sheet," Lason Les, CEO from Riot Blockchain, told Blockwork and found that the company sold Bitcoin production every month. "There is no strict framework or guidelines for this. It is a decision that we evaluate every month."

The Compass Point Research & Trading Analyst Chase White and Joe Flynn said in a Research Note on June 28 that they assume that Riot will accept new debts or sell more of its Bitcoin production, “but the company is well positioned in order to survive the volatility of the BTC in terms of the lack of debt and considerable BTC stocks. “

Hive Blockchain Technologies said in a statement that his expansion plans were financed in "challenging times in the market cycle" by selling his current product from Bitcoin and ether.

The company sold ether last year to expand its Bitcoin footprint, since its ETH position from 25,000 ETH dropped to 7,667 ETH. But in the update of July 7, Hive said that it was trying to hold his Bitcoin stock stocks, which were on July 6th at 3,239 BTC.

Marathon Digital, which held on June 30, 0055 BTC, has no longer sold Bitcoin since October 2020, Charlie Schumacher, Vice President of Corporate Communications.

"Although we believe in Bitcoin in the long term, our decision to continue Hodl is a strategic decision, not necessarily a principle," he said.

"Bitcoin is a tool that we can use. By holding it, we can increase our financial freedom of choice."

The mining company received a revolving credit line of $ 100 million from Silvergate Bank last October, which was secured by Bitcoin and USD.

"Given that we produce BTC with a fairly healthy margin, it can make sense for us to sell part of our monthly Bitcoin production when our production is up] as needed to finance the monthly operating costs," noted Schumacher.

hat 8 builds its computer business from

Although mining remains the core business of HUT 8 and about 90 % of sales, Ennis said that the company will concentrate more on its cloud computing and web3 business. Hut 8 has been preparing since last year, adding the executive and found that the current macroeconomic downturn had not promoted the decision.

ennis said that his computing business is well on the way to grow by about 15 % in the year because it strives to serve more web3 and blockchain-focused customers.

"Obviously the entire crypto industry suffered, but projects still have to be saved at the end of the day," she said. "Projects still need security. Projects, especially in the blockchain gaming area, still have to be digitized and rendered.

HUT 8 acquired five data centers in Canada from Terrago, a company for wireless connectivity in January. The purchase then came Jaime Leverton which has a background in the transformation of data infrastructure, took over in December 2020 the position of the CEO of HUT 8.

Ennis said Blockworks in March that HUT 8 wants to offer an Alternative to cloud computing giants such as Amazon Web Services, Google Cloud and Switch.

HUT 8 took over government customers as well as customers in the areas of media and entertainment and financial services that their cloud computing services used. Although Ennis rejected it to disclose new customers on the web3 page, it has a nine-person sales team that builds up a pipeline.

mining will soon be consolidation?

Steve Russell, co-portfolio manager of the Finance and Banking Innovation Fund (HSSAX) by Emerald Mutual Funds, Blockworks said last week that he was expecting a "cleaning up" in the course of next year, from which winners and losers in the mining area emerged.

White and Flynn wrote in their research note that lower BTC prices-they estimate average values ​​of $ 21,500 or 34,000 in the second half of 2022 or in the year 2023-the growth of the global hash rate will probably be "suppressed".

Ennis said that mergers and takeovers are something that the company had on the radar, especially after the company's $ 172 million.

"I think there is still pain," said Ennis about the sector companies.

"We have certainly seen how miner sold to pay their balance sheet and capital obligations for equipment, but we still believe that there is still a further way to be."

les said riot blockchain tested constantly possible M&A deals.

"We think that with our strong, no fault of their own we are able to act opportunistic here," he said.

bring the best crypto and findings of the day into your inbox every evening. .

The contribution Krypto Mining Companies pursue different approaches to selling Bitcoin is not a financial advice.