Bitcoin miners search for ways to avoid a crypto winter

By Raffaele Redi

Rhodium Enterprises and Bit Digital have both launched stock offers

Bitcoin mining farm with banks of computers and cooling equipment                                 
Some bitcoin miners have lost around one-third of their value on the stock market – Photo: Shutterstock
                                

Following the crash in BTC’s price, bitcoin miners are beginning a search for liquidity with some major players in the industry looking for cash on the market or to diversify their offer.

In the past year, the Hong Kong-based Bit Mining has seen its stock price halve to the current $3.16 per share.

Meanwhile, large players like Marathon Holdings, Greenidge and Riot Blockchain have watched their shares lose more than 30% in value, with current US pre-market figures predicting more suffering to come in the short term.

In other words, few miners are finding humour in bitcoin’s price chart that has created patterns resembling the sharply pointed ears of Pokémon’s Pikachu.

A ‘fertile’ way of getting cash

To resist cryptos’ winter, some bitcoin miners have started to issue common shares to get a cash injection following the falls in bitcoin and their share price. 

The need for liquidity has prompted large miners like Rhodium Enterprises and Bit Digital to kick off winter sales, but these firms could be followed on their heels by other miners, which are being bled on the traditional stock market.

Rhodium has launched an offer of 8.8 million common shares that could fetch a whopping $124m out of the sale, while Bit Digital has placed its hopes in raising $224m from the sale of 10 million warrants with 13 million shares.

Another miner, the Graystone Company, has decided to explore the option of selling holistic health products as it waits for the price of BTC to recover from recent losses.

In particular, the company is focusing on the fertility sector, with the global fertility supplements market projected to reach $2.39bn by 2025.

Crypto market projections

According to a report from Allied Market Research, the global cryptocurrency market is estimated to reach $4.94bn by 2030, growing at a compound annual growth rate (CAGR) of 12.8% from 2021 to 2030, mainly due to a surge in the flow of remittance from foreign countries. In 2020, the global cryptocurrency market generated $1.49bn.

The report adds that the crypto market is dominated by the mining segment, which accounted for nearly two-thirds of revenue in 2020.

Some experts, in fact, seem bullish on crypto in the long term, betting on a quick recovery from the pandemic.

“The Covid-19 outbreak resulted in distorted business operations for receiving upgraded equipment and new hardware, which hampered the mining operations. This factor negatively affected the cryptocurrency market,” said Allied Market Research in the report.

“However, as the world is recovering from the pandemic, the market is expected to get back on track soon,” it added.

“Increase in demand for transparency in the payment system and surge in flow of remittance from foreign countries have boosted the growth of the global cryptocurrency market. However, dearth of awareness regarding virtual currency hinders the market growth. On the contrary, potential in the developing countries would open new opportunities in the future,” Allied Market Research concluded.

Further reading

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