According to Bloomberg, the largest US Bitcoin miner announced in July that it was adopting a strategy similar to the one employed by Marathon, one of several public mining companies that have started increasing Bitcoin holdings again following the April software code adjustment known as the ‘halving’ that reduced revenue. In 2022, many miners were liquidating their coin reserves to stay afloat amid inflated energy prices and a series of industry meltdowns. Miners mint the cryptocurrency through a process where they compete to solve computational puzzles to unlock rewards in exchange for processing transactions on the Bitcoin blockchain.
The ‘hodling’ strategy, as it is known in the crypto community, can enhance public mining companies’ status as a leveraged proxy on Bitcoin prices in the stock market and boost their share prices, which is one of the main sources of financing for the miners, said Ethan Vera, chief operating officer at Luxor Technology. The issuance of convertible notes also raises the likelihood that the holdings of existing shareholders can be diluted. In July, Marathon announced that it bought $100 million worth of Bitcoin. It held 20,818 Bitcoin with $1.6 billion in total cash and digital assets as of July 31. The Fort Lauderdale, Florida-based company posted a second-quarter net loss of almost $200 million, mostly from the writedown of the value of the digital assets it holds.
The notes, which will be offered in a private placement to institutional investors, mature in 2031, the company said in a statement.
