Lưu trữ cho từ khóa: Mining

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CleanSpark and MARA stocks form rare pattern as BTC hits 54k

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CleanSpark and MARA stocks form rare pattern as BTC hits 54k

Popular Bitcoin mining stocks have formed the rare death cross pattern, pointing to more pain ahead.

CleanSpark and Marathon Digital have formed a death cross

Marathon Digital, the largest mining company in the industry, dropped to $13.75 on Sep. 6, its lowest swing since December of last year. It has fallen by 60% from its highest point this year, erasing over $4 billion in value.

Similarly, CleanSpark shares crashed to $8.39, the lowest point since February, and are 66% below their highest level this year. Its market cap dropped from $5 billion in March to $2 billion.

Other Bitcoin (BTC) mining stocks, such as Riot Platforms, Core Scientific, Cipher Mining, and Argo Blockchain, have also continued to fall.

Most notably, Marathon Digital and CleanSpark have formed a death cross pattern, where the 200-day and 50-day moving averages have crossed each other. In most periods, this pattern leads to more downside.

Marathon Digital stock | Source: TradingView

A notable example of this is Riot Platforms, which formed a death cross on April 9. Since then, the stock has dropped by 40% and is hovering at its lowest point since March 2023, making it one of the worst-performing mining stocks this year.

Bitcoin is also nearing a death cross

These mining stocks are crashing due to a combination of two factors: low Bitcoin prices and weak production.

Bitcoin dropped below $55,000, reaching its lowest point since Aug. 7. It has fallen by 25% from its highest point this year and by 15% from its August high.

Bitcoin’s sell-off may continue as it has formed a series of lower lows and lower highs. It is also close to forming a death cross, indicating that bears have taken control. A drop below last month’s low of $49,000 could signal further downside.

Bitcoin price chart | Source: TradingView

Bitcoin mining companies are also producing fewer coins than they did in August because of the halving event. Marathon Digital produced 673 coins in August, down from 692 in July and 850 in April.

Similarly, CleanSpark produced 478 coins in August after producing 721 in April while Riot Platforms mined 322 coins in August from the previous month. Other mining companies have seen a similar drop in production.

Therefore, a combination of lower Bitcoin prices and weak production suggests that their revenue will continue to decline, while the mark-to-market value of their holdings will also drop. Marathon Digital, Riot Platforms, and CleanSpark hold 25,000, 9,334, and 7,052 coins on their balance sheets.

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Bitcoin

Bitfarms sells 60% of August Bitcoin production amid rising network difficulty

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Bitfarms sold over 60% of August Bitcoin production amid rising network difficulty.

Canadian Bitcoin (BTC) miner Bitfarms announced that it sold nearly 63% of the Bitcoin it mined in August, amounting to 147 BTC out of the 233 BTC generated during the month.

In its August 2024 update, the Toronto-based company highlighted the sale as part of its ongoing focus on active treasury management amid the “increase in average network difficulty.”

The sale generated approximately $8.8 million in revenue, contributing to Bitfarms’ liquidity while allowing the company to grow its Bitcoin holdings. Despite the challenging conditions, Bitfarms added 86 BTC to its treasury, bringing the total to 1,103 BTC, valued at approximately $65.1 million as of Aug. 31, 2024.

Bitfarms production per August | Source: GlobeNewswire

August marked a particularly difficult month for Bitfarms, with the network difficulty decreasing by 1.3%, a modest reprieve after months of escalating challenges. The company’s total Bitcoin production dropped to 233 BTC, down 8% from July’s 253 BTC and nearly a 40% year-over-year decline from August 2023’s 383 BTC.

The reduction in output was partially offset by Bitfarms’ ongoing efforts to optimize its mining operations. The company received and began installing 2,744 new T21 miners from Bitmain, replacing underperforming units. By the end of August, Bitfarms’ operational capacity reached 11.3 EH/s, a 102% increase year-over-year and a 2% gain compared to July.

Bitfarms braces for future prospects

As the Bitcoin network continues to evolve, Bitfarms aims to position itself to adapt to the shifting landscape. The average operating efficiency remained at 25 watts per terahash, according to the report. However, the decline in BTC per average EH/s — from 25 BTC in July to 22 BTC in August — reflects the ongoing challenge of rising network difficulty.

The report comes as its key rival, Riot Platforms, urged Bitfarms’ shareholders in a public statement to support changes to Bitfarms’ board at an upcoming Oct. 29 meeting, citing concerns over “broken governance.”

In the statement, Riot criticized Bitfarms for what it described as “defensive” tactics to entrench the existing board, including a recently announced acquisition of Stronghold Digital Mining Inc. The company also questioned the timing and terms of the $175 million deal, suggesting it was engineered to benefit legacy directors “whose focus is maintaining their own positions.”

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Bitcoin

Analyst remains bullish on Cipher after 2.5 GW energy expansion in Texas

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Analysts at H.C. Wainwright & Co. believe Cipher’s recent acquisition in Texas will enhance its strategic operations.

Cipher recently announced the acquisition of a 300 MW development site in West Texas, increasing its total energy pipeline to over 2.5 GW across 10 locations, according to analysts at H.C. Wainwright.

The deal, valued at $67.5 million or $225,000 per MW, also includes a $3 per MWh variable fee for the first five years post-energization. This acquisition is notable for its front-of-the-meter capacity, a fully energized substation, and 250 acres of surrounding land.

While the company’s management did not provide details on construction and energization timelines, they highlighted the site’s potential for high-performance computing infrastructure and Bitcoin (BTC) mining. 

Acquisition details

The analysts view the acquisition as a strategic move to secure low-cost power in West Texas, a region known for its attractive energy pricing, likely ranging between 2 and 3 cents per kWh. 

The full build-out of the site could require an additional $67.5 million, assuming its use for BTC mining.

The research firm reiterated their Buy rating of Cipher’s stock, with a $7 price target, reflecting a 7.0x market cap-to-revenue multiple on their 2025 revenue estimate of $313.5 million. However, risks include BTC price volatility, increasing network hash rates, and potential shareholder dilution.

At the time of writing, Cipher’s stock, ticker CIFR, is trading at $3.70.

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Bitcoin mining stocks stay weak as options market hints at rebound

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Bitcoin mining stocks trended lower as volatility in the cryptocurrency continued.

Marathon Digital, the biggest mining company, dropped by 2.3% on Aug. 28, marking a 38% decline from its highest point this month. CleanSpark stock fell by 1.75% to $11.25, while Riot Platform dropped by over 1.4%. Other large Bitcoin (BTC) mining stocks like Argo Blockchain, Core Scientific, TeraWulf, and Cipher Mining also pulled back.

Most of these stocks remain in a deep bear market after falling by over 20% from their highest level this year. 

Their performance is closely tied to Bitcoin’s price action since March. After peaking at a record high of $73,800, Bitcoin has retreated by 18.78% to $60,000. Generally, Bitcoin miners thrive when BTC is rising and vice versa.

Additionally, these companies have struggled due to the Bitcoin halving event in April, which has pushed the hash rate higher. Most of them have mined fewer Bitcoins than they did before the halving event.

Marathon Digital mined 894 coins in March and 692 in July. Similarly, CleanSpark mined 806 coins in March and 494 in July while Riot Platforms produced 425 coins in March and 370 in July.

As a result, these companies are battling the dual effects of lower mining production and declining Bitcoin prices.

Some of them are dealing with the crisis differently. Bitfarms, a leading Canadian miner, acquired rival Stronghold Digital this month. Riot Platforms has also trained its eyes on Bitfarms and has become one of its top shareholders.

Marathon Digital has started mining Kaspa (KAS) and has continued accumulating Bitcoin holdings. Earlier this month, it bought Bitcoins worth $249 million, becoming the second corporate BTC holder after MicroStrategy.

Bitcoin price to support mining stocks

The price of Bitcoin mining stocks will largely depend on Bitcoin’s price action. There are a few catalysts that could push BTC prices higher.

Data in the options market shows that the Aug. 30 expiry has 93% of all call options being Out-of-the-Money, with a strike price above $60,000. A call option gives a holder the right but not the obligation to buy an asset.

However, in the long term, the options market is predicting a potential rally to $90,000 by the end of the year.

Bitcoin open interest by strike price | Source: Deribit

Bitcoin continues to see strong inflows in the ETF market. While funds suffered outflows of $127 million on Aug. 27, they have added over $17.95 billion this year. Blackrock’s ETF has over $22.2 billion in assets while Fidelity’s fund has $11 billion and is about to pass Grayscale’s Bitcoin Trust.

Other potential catalysts for Bitcoin include the upcoming Federal Reserve interest rate cuts, a potential Donald Trump victory, the return from summer, soaring US debt, and institutional demand.

If these catalysts align and Bitcoin rebounds, there is a high chance that most Bitcoin mining stocks will bounce back.

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Theo Crypto News

Bitcoin

Bitcoin miner Vortex Brands puts MicroStrategy shares on balance sheet

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Bitcoin mining firm Vortex Brands has begun acquiring MicroStrategy stock as part of a new strategy to leverage its Bitcoin-focused business model and enhance its investment holdings.

Crypto mining firm Vortex Brands has initiated a new investment strategy by acquiring shares of MicroStrategy, a move aimed at capitalizing on the company’s Bitcoin-centric approach.

With the new strategy, the Bitcoin mining firm purchased an initial 10 shares of MSTR and plans to add “at least that many shares monthly and report holdings quarterly,” an Aug. 28 press release reads. Vortex Brands CEO Todd Higley says integrating MicroStrategy stock into the firm’s portfolio will allow it to “leverage the arbitrage strategy MicroStrategy employs between the corporate public markets and the value of Bitcoin.”

“This move aligns with our positive outlook for Bitcoin and our belief in hard assets, including certain digital assets, as the preferred investment and business activity in today’s post-low-inflation environment.”

Vortex Brands CEO, Todd Higley

This strategy comes amid activity in the Bitcoin investment landscape focused on MicroStrategy as one of the largest public (BTC) holders.

Earlier in August, South Korea’s National Pension Service disclosed a significant investment in MicroStrategy, purchasing nearly $34 million worth of shares in Q2. The NPS acquired 24,500 shares at an average price of $1,377.48 each, which, following a recent 10-for-1 stock split, has resulted in a holding of 245,000 shares valued at approximately $32.3 million based on the latest closing price of $131.9.

In addition to its investment in MicroStrategy, the NPS also holds a big chunk of Coinbase shares, with 229,807 shares valued at over $45 million, reflecting the growing interest in the crypto space.

With the latest investment strategy, Vortex Brands is also preparing to unveil a new division aimed at diversifying its revenue streams while enhancing its Bitcoin mining operations to increase its crypto accumulation, the press release reads.

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Bitcoin

Miners’ bad luck: Rhodium goes bankrupt

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The firm has filed for bankruptcy in the Southern District of Texas.

The U.S. Bitcoin miner has debts of $50 million to $100 million, and the total assets of Rhodium Enterprises are estimated from $100 million to $500 million. The bankruptcy petition includes six subsidiaries, namely Rhodium Encore, Jordan HPC, Rhodium JV, Rhodium 2.0, Rhodium 10MW and Rhodium 30MW.

The company’s financial difficulties have been exacerbated by declining profits for Bitcoin miners, especially after the last halving. The reduction in miner rewards, coupled with higher electricity prices, has further reduced the size of miners’ profits.

In July, Rhodium Enterprises failed to repay loans worth $54 million. In 2021, the company raised $78 million in loans for its subsidiaries. Despite two proposed debt restructuring plans, disagreements among stakeholders led to a default.

How crypto companies file for Chapter 11

After the collapse of the Terra ecosystem, a wave of bankruptcies swept the cryptocurrency market. Celsius Network, Three Arrows Capital, Voyager Digital, FTX, and several other major crypto firms have declared insolvency.

Many of these companies are undergoing the relevant procedure in the U.S., where filing under Chapter 11 of the U.S. Bankruptcy Code allows them to reorganize their business and pay off the debts to creditors.

Under Chapter 11, the company can also restructure its debts and continue operating. As for mining firms, in 2022, Core Scientific did the same, using a bankruptcy filing to protect itself from creditors. The company emerged from bankruptcy in early 2024.

The worst time to mine Bitcoin

Bitcoin mining has faced difficult times amid the April halving and the fall of its price (BTC). Experts at BlocksBridge Consulting said that cryptocurrency mining was on the verge of profitability for market participants without access to cheap electricity. Even after recovering the Bitcoin price, the hashrate barely exceeded $40 per PH/s.

According to experts, independent mining in the context of rising electricity costs will likely bring net profit after taxes. The financial reports of three major companies, MARA (Marathon Digital), Core Scientific, and Riot, indicate that their Bitcoin mining costs in July exceeded $60,000 per coin.

In addition, CryptoQuant analysts stated that the Hash Ribbons indicator shows that large miners are switching to more energy-efficient equipment and returning to the market. CryptoQuant experts believe that miners will continue to adhere to the chosen strategy of investment diversification, expecting the value of the first cryptocurrency to rise to $70,000 and above by the end of the year.

Mining centralization

Rhodium’s bankruptcy became an example of a statement by CryptoQuant analysts, who predicted that miners would gradually leave the market. Smaller companies need more funds to purchase expensive equipment, and conglomerates of large participants will begin to form on the market.

Source: btc.com 

This is also evidenced by BTC.com data, which shows that two mining pools control more than 50% of the current bitcoin hashrate — Foundry USA and AntPool.

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Bitcoin

Thailand raids illegal Bitcoin mine after frequent power outages

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Thai authorities raided an illegal Bitcoin mining operation in Ratchaburi, a town west of Bangkok, following reports of frequent blackouts over the past month. 

According to AFP reports, the raid, carried out by the Provincial Electricity Authorities and local police, uncovered evidence of Bitcoin (BTC) mining rigs consuming large amounts of electricity.

These grids were unregistered and were not being paid out or reported properly. 

Power grid issues 

Jamnong Chanwong, a chief district security officer, explained in the AFP report that the operation likely became fully operational in mid-July, coinciding with the start of the power outages.

The unregistered mining activity caused frequent power outages and posed significant risks to the electrical infrastructure, potentially leading to long-term damage and higher costs for local residents.

Despite the massive electricity consumption, the mining operation paid minimal fees, raising suspicions and prompting the raid. By the time authorities entered the property, much of the equipment had been moved, and no arrests were made.

Bitcoin mining is expensive and requires local fees and taxes. Earlier this month, an Airbnb host discovered her guests had been mining crypto at her property, resulting in a $1,500 electricity bill. 

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This on-chain movement could bring Bitcoin price down, analyst says

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Bitcoin surpassed the $60,000 mark again as the broader market witnessed a recovery, but a key indicator shows the expectation of another price fall.

Bitcoin (BTC) surged by 2% in the past 24 hours and is trading at $60,800 at the time of writing. Its daily trading volume increased by 30%, reaching $34.8 billion. Bitcoin’s market cap is currently sitting at the $1.2 trillion border.

According to an X post by CryptoQuant, the surge comes as BTC over-the-counter desk balances for miners have increased by 71.2% over the past three months — rising from 215,000 to 368,000 BTC. this is the first time since June 2022 that the BTC OTC desk balances surpass the 300,000 BTC mark.

This movement usually happens when miners want to sell their holdings in OTC deals rather than cryptocurrency exchanges. The chart shows that the last three major spikes in Bitcoin’s OTC desk balances for miners have exerted major selling pressure on Bitcoin and the crypto market.

An analyst under the alias @EgyHashX noted that “historically, increases in Bitcoin OTC desk balances have been associated with declines in Bitcoin prices.” According to data from Santiment, the Bitcoin supply held by miners has increased by roughly 20,000 BTC — rising from 2.17 million to 2.19 million coins — over the past month. 

BTC price, supply held by miners and exchange flow – Aug. 22 | Source: Santiment

On the other hand, data from the market intelligence platforms shows an increase in the retail Bitcoin accumulation. Per Santiment, the asset’s exchange flow dropped from a net inflow of 6,783 BTC on Aug. 17 to a net outflow of 1,006 BTC on Aug. 22.

The chart also shows the number of coins sent to self-custodial wallets is currently bigger than holders trying to sell the asset.

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Bitcoin

Bitcoin miner Bitfarms to acquire rival Stronghold Digital

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Cryptocurrency mining giant Bitfarms has entered a definitive merger agreement to acquire Stronghold in a stock-for-stock merger transaction.

Canadian crypto miner Bitfarms is set to acquire its U.S.-based rival Stronghold Digital in a transaction valued at approximately $175 million, including $125 million in equity value and $50 million in assumed debt.

In an Aug. 21 press release, Bitfarms said that acquiring Stronghold would bring significant assets, including a 4.0 EH/s hashrate and 165 MW of power capacity as of June 2024. The company owns over 750 acres of land and two power plants in Pennsylvania.

Despite the news, Bitfarms shares (BITF) plunged 7.2% to $2.19 in pre-market trading, according to Nasdaq data.

The merger is expected to expand Bitfarms’ energy portfolio, increasing its capacity to over 950 MW by the end of 2025, with potential future expansions bringing total capacity to 1.6 GW. Bitfarms chief executive Ben Gagnon labeled the acquisition a transformative step, saying the company expects to have “visibility on multi-year expansion capacity up to 1.6 GW with approximately 66% in the U.S., up from approximately 6% today.”

“By vertically integrating with power generation, expanding our energy trading capabilities and securing two high potential sites for HPC/AI with significant multi-year expansion potential, we are executing our strategy to diversify beyond Bitcoin mining to create greater long-term shareholder value.”

Ben Gagnon, Bitfarms CEO

Bitfarms expands portfolio amid takeover attempts

Bitfarms says the merger, which both companies’ boards have unanimously approved, is expected to close in the first quarter of next year, pending shareholder and regulatory approvals.

Under the agreement, Stronghold shareholders will receive 2.52 shares of Bitfarms for each share owned, the press release reads. This represents a 71% premium to Stronghold’s 90-day volume-weighted average price on the Nasdaq as of Aug. 16. The combined company is projected to achieve $10 million in annual cost synergies post-merger.

The merger announcement comes as Bitfarms faces a takeover attempt by Riot Platforms, a competing Bitcoin mining company. As crypto.news reported earlier, Riot acquired 1 million common shares of Bitfarms, raising its stake to approximately 18.9%. That move followed Riot’s $950 million takeover bid earlier this year, which was withdrawn after failing to gain traction with Bitfarms’ board.

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