The largest publicly traded bitcoin mining companies in North America have over 20,000 BTC worth more than $1.1 billion. They have borrowed money or issued equity to fund this “Hodl” strategy for expenses and expansion.
Several publicly traded bitcoin mining companies in North America have amassed over 20,000 BTC, which is worth more than $1.1 billion at current prices.
Riot, Marathon, Bitfarms, Hut8, Greenidge, Argo, and HIVE mined a total of 6,463 BTC in Q3, accounting for approximately 7.5 percent of the total BTC block rewards available during the period, according to their most recent monthly production data.
Riot, Marathon, Bitfarms, Hut8, Argo, and HIVE’s Q3 bitcoin mining output is approximately 82 percent higher than their Q2 numbers, owing to equipment expansion and waning competition from Chinese miners following the country’s recent crackdown.
Greenidge, based in New York, went public in the third quarter of this year through a merger deal and has thus only disclosed its production and earnings for the quarter. BIT Digital, the only North American bitcoin mining firm with operations in China and thus affected by China’s crackdown, has yet to release its third-quarter results.
Cleanspark is a newcomer to the North American bitcoin mining market this year. Aside from Cleanspark, BIT Digital, and Greenidge, the other companies have added all of their mined BTC to their balance sheets year to date, totaling 20,459 BTC, including 4,812 BTC of Marathon purchased from the secondary market earlier this year.
Loans backed by Bitcoin
Because these companies are still holding their mined bitcoin on their balance sheets and have not liquidated it, they must ensure that they have enough funds to pay utility bills, pre-order new equipment, or expand their facilities in the midst of a North American infrastructure boom. To that end, some of these businesses are borrowing money.
Argo Blockchain, for example, recently pledged some of its mined BTC as collateral to Galaxy Digital in exchange for a $25 million loan. Marathon recently secured a $100 million revolving line of credit from Silvergate Bank, which was backed by its BTC and cash reserves. Hut8 borrowed $12 million from DCG’s Foundry earlier this year to fund its equipment expansion.
This strategy is similar to what Chinese bitcoin miners have been doing since early 2019, betting on the upside of BTC’s growth while bearing a rate of return. They also accepted the risk that their collateral would be forced liquidated during periods of extreme market volatility, such as March 2020. If the cryptocurrency market crashes, a similar situation could arise for US miners.
However, in addition to loans, publicly traded miners in the United States have turned to the public market this year to increase working capital and fuel expansion plans.
Hut8 and Argo raised $150 million and $112 million, respectively, in public offerings last month, and BIT Digital recently closed a $80 million private placement.
Bitfarms raised $30 million in a private placement from US institutions earlier this year. Cleanspark, a Nasdaq-listed company, raised $200 million in a public offering as it entered the bitcoin mining space.