According to a report released by JPMorgan on Wednesday, MicroStrategy (MSTR), the software company founded by Michael Saylor, is not the only large corporation buying bitcoin (BTC). The report stated that crypto miners are also adopting a strategy of accumulating the cryptocurrency. This shift is driven by the pressure on profitability caused by the reward halving in April and the increasing network hashrate. Hashrate is a measure of the total computational power used to mine and process transactions on a proof-of-work blockchain, and it is a proxy for competition in the industry and mining difficulty.
The report, written by analysts led by Nikolaos Panigirtzoglou, stated that this pressure likely prompted miners to hoard or seek further investments into bitcoin, or diversify into AI/HPC businesses, referring to artificial intelligence and high-performance computing. As a result, miners such as MARA Holdings (MARA) have adopted a similar bitcoin-buying strategy to MicroStrategy, called BTC yield.
MARA now owns 35,000 tokens, worth $3.5 billion, making it the second-largest publicly listed corporation in terms of bitcoin holdings. However, miners are not the only ones buying bitcoin. Medical-device maker Semler Scientific has also been actively buying the world’s largest cryptocurrency, and now owns $144 million worth of crypto.
The introduction of spot bitcoin exchange-traded funds (ETFs) in the U.S. in January has given institutional investors a more direct way to gain bitcoin exposure, the bank said. This has resulted in shares of miners, which were previously treated as a proxy for bitcoin, underperforming.
The report also noted that aside from buying more bitcoin, miners are increasingly financing their businesses through debt and equity offerings, rather than selling their crypto reserves to cover operational costs. In fact, miners have raised more than $10 billion in equity so far this year, surpassing the previous high of $9.5 billion in 2021.
Overall, the report suggests that the trend of large corporations and institutional investors buying bitcoin is likely to continue, driven by various factors such as the reward halving, increasing network hashrate, and the introduction of bitcoin ETFs.
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