Bitcoin mining firms are turning to billions of dollars in new financing as high energy prices weigh on profits.
Faced with rising energy costs, Bitcoin (BTC) miners in the United States are building multibillion-dollar war chests as competition for resources intensifies and profitability remains under pressure following Bitcoin’s latest halving, the Financial Times reports.
Companies like Marathon Digital, Riot Platforms, and CleanSpark have raised more than $3.7 billion through convertible notes with zero or near-zero coupons since November 2024. As the largest cryptocurrency in terms of market cap surpassed $100,000, most of the money went to buying Bitcoin to bolster reserves.
Marathon CEO Fred Thiel said their business strategy is to “accumulate as much Bitcoin as they can.” [we] The company currently holds approximately 45,000 BTC, worth over $4.4 billion.
Still, miners face some big challenges. Energy costs continue to rise and the Bitcoin hash rate is at an all-time high. Moreover, Bitcoin’s latest halving halved mining rewards, dropping from 6.25 BTC per block to just 3,125 BTC.
James Butterfill, head of research at CoinShares, says the firm has “seen a phenomenal increase in the Bitcoin hash rate, underscoring the massive amount of new hardware coming online, making those at the highest end of the cost of production much more vulnerable.” Price correction.”
Miners are also competing with AI developers for access to the power grid. The report states that some companies, such as Hut 8 and Hive, have turned to renting their data centers to artificial intelligence companies to offset costs. Others, like Marathon, are expanding their operations into energy-surplus countries like Kenya and Paraguay.