Bitcoin (BTC) miners are holding more and more Bitcoin as they “relentlessly expand” their operations in 2022.
A report from Arcane Research indicates that public Bitcoin miners are “constantly looking for expansion opportunities” as they “plan to increase hashrate faster than the entire network in 2022.”
According to the latest data from the Cambridge Bitcoin Consumption Index, 44.95% of the world’s hashrate comes from North American miners. With a projected massive increase in hashrate target among publicly traded bitcoin miners, it is “likely to increase.”
Jaran Mellerud, an analyst at Arcane Research, told Cointelegraph that “most publicly listed miners are following a hodle strategy, doing everything they can to keep as many bitcoins mined as possible.”
“This hodl strategy allows them to serve as investment vehicles in bitcoin for investors who want to indirectly own bitcoin through an investment structure.”
Whit Gibbs, founder and CEO of Compass Mining, explained to Cointelegraph that “State-owned mining companies definitely have an edge when it comes to storing Bitcoin because they have access to the capital markets.”
“They don’t have to liquidate their bitcoin to buy more cars, more rack space, etc. They can go into the capital markets and get that money to continue expanding. So they can take large positions in bitcoin.”
Gibbs adds that some of the biggest miners own massive amounts of Bitcoin, “it’s crazy how much some of them have.” As published on the BitcoinTreasuries website, Bitcoin mining company Marathon owns the third largest amount of Bitcoin among enterprises worldwide, right behind Tesla and Microstrategy.
Since January 2021, miner reserves have been steadily increasing, reflecting their HODL strategy. Gibbs suggests that publicly traded Bitcoin mining companies are “taking a more optimistic approach to Bitcoin.”
“Companies are looking at bitcoin on their balance sheet as a way to boost their market value.”
Mellerud also understands that Bitcoin mining stocks are becoming more popular in traditional financial markets. “Demand for Bitcoin investment instruments is high, especially in the US, as the Bitcoin ETF market is still immature.” The bitcoin exchange-traded funds (ETF) story is the Achilles’ heel of the network: consecutive bids for bitcoin ETFs were rejected.
On the subject: Bitcoin mining difficulty decreased for the first time this year
As market interest in bitcoin miners grows, Mellerud summarizes why the mining business model is attractive and efficient, echoing Gibbs’ comments:
“Miners are among the biggest bitcoin bulls, and they use the highly developed equity and debt markets in the US to raise money to pay for their expansions and operating costs, which allows them to keep the bitcoin they mine.”
For example, Bitcoin Miner Hut 8 recently reported record earnings and its total BTC holdings rose by 100%. 2022 may not be the year of the bull, but it is certainly a good time to publicly mine the orange coin.