Ben Strack

A number of crypto stocks booked massive — and elusive of late — gains in Thursday’s trading session, with crypto miners Hive Blockchain and Marathon Digital among those that skyrocketed amid signs of slowing inflation and a subsequent boost for bitcoin.  



The share price gains across the sector followed Thursday’s US Consumer Price Index (CPI) report, which showed that <a href="https://blockworks.co/news/cpi-falls-in-december">core inflation</a> rose 5.7% in December from a year earlier, marking another indicator of slowing or reversing inflation. November inflation’s metric had risen 6% year-over-year.&nbsp;&nbsp;



In the hours after the report, crypto companies notched big stock price boosts. The pops in individual digital asset-related equities mirrored a rise in token prices, as bitcoin and ether were up 8% and 6.4% in the past 24 hours, respectively, through Thursday’s close in New York.&nbsp;



Canada-based Hive Blockchain was also up on the day, then posting staggering stock gains of about 37%.&nbsp;



Hive is in the middle of a <a href="https://blockworks.co/news/hive-intel-efficiency-upgrade">“massive efficiency upgrade,”</a> the company said this week as it installs a new series of customized miners powered by Intel processors.&nbsp;&nbsp;



Meanwhile Marathon Digital rose by about 31% on the day, bringing its year-to-date increase to about 107%. The company mined 1,562 bitcoins in the last three months of 2022 — a quarterly record. &nbsp;



Rival miner Riot Blockchain was also up on the day, rising nearly 15%.



Despite a <a href="https://blockworks.co/news/more-crypto-miner-bankruptcy-2023">tough</a> second half of 2022 for bitcoin miners, Riot CEO Jason Les had <a href="https://blockworks.co/news/riot-blockchain-ceo-firm-is-one-of-mining-spaces-best-positioned-acquirers">told Blockworks</a> in October the company was one of the mining sector’s “best-positioned acquirers.” Some analysts have expressed high conviction in Riot due to its lack of debt.&nbsp;&nbsp;



Crypto bank Silvergate and Coinbase were also in the green, albeit not as much — notching Thursday stock price rises of about 13% and 9%, respectively.&nbsp;



It was a reversal for Silvergate, whose stock <a href="https://blockworks.co/news/silvergate-stock-plummets-45-on-major-staff-cuts-massive-withdrawals">plummeted</a> last week on news that the crypto bank was forced to sell off scores of assets at a major loss to fulfill $8 billion of customer withdrawals during the fourth quarter.



Coinbase has also been plagued by stock ups and downs as it seeks to reel in spending. The company said Tuesday it was <a href="https://blockworks.co/news/coinbase-lays-off-950-staff-cuts-operational-costs-by-25">cutting an additional 950 staff</a> as part of cost-saving measures.



MicroStrategy, the largest publicly traded holder of bitcoin, was up about 8% on the day.&nbsp;



The stock price rises reflect appetite for risk. <a href="https://blockworks.co/news/crypto-stocks-double-digit-gains">Double-digit daily gains</a> for certain crypto stocks last week came as Wall Street grew confident that the Federal Reserve’s tightening path could end soon, one analyst said. 



Tom Essaye, founder of Sevens Report Research, <a href="https://blockworks.co/news/crypto-stocks-correction-pending">said Wednesday</a> before the CPI print that inflation metrics would need to continue falling quickly if the market hopes to sustain a broader rally.



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Crypto Miners Log Double-digit Stock Price Gains After CPI Report

<div id="highlights-block_632389c426161" class="highlights">
 <ul>
 <li>Hive seeks to grow its bitcoin mining hash rate by 50% over the next six months, executive chairman says</li>
 <li>Ethereum Classic’s hash rate, formed in 2016 as a result of The DAO hack, roughly tripled following the Merge to about 215 terahashes per second (TH/s)</li>
 </ul>
 
</div>



Ethereum’s switch to an underlying <a href="https://cms.blockworks.co/ethereum-switches-to-proof-of-stake-after-7-years-of-work/" target="_blank" rel="noreferrer noopener">proof-of-stake consensus model</a> has forced ether mining operations to pivot, which industry watchers said could trigger a wave of acquisitions. 



Though some of the bigger Ethereum miners will be fine, White Rock Management CEO Andy Long told Blockworks, they will likely be looking for ways to acquire extra hash rate quickly.



Hive Blockchain Technologies, previously the largest publicly traded miner of ether (ETH), mined 821 bitcoins (BTC) and 7,675 ETH during the year’s second quarter. It has sold ether in recent months to buy new application-specific integrated circuits (ASICs) for bitcoin mining, including as part of <a href="https://www.hiveblockchain.com/news/hive-blockchain-announces-landmark-deal-to-buy-new-high-performing-asic-chips-from-intel-and-a-100-mw-renewable-energy-deal-in-texas/" target="_blank" rel="noreferrer noopener">an agreement with Intel Corporation</a>. 



Hive Executive Chairman Frank Holmes told Blockworks that the company has the cash to complete payments on Intel miners and is seeking other opportunities amid an oversupply of machines.



“We’re of the opinion that there’s going to be some great buys for equipment and for everything over these next six months,” Holmes said.&nbsp;



Hive entered into an <a href="https://www.hiveblockchain.com/news/hive-blockchain-establishes-us100-million-at-the-market-equity-program/" target="_blank" rel="noreferrer noopener">at-the-market equity offering agreement</a> earlier this month to sell up to $100 million of company shares to support the growth of its mining operations. The executive said the firm did so “in the event that something comes up that it can buy something 10 cents on the dollar.”



<h3 class="wp-block-heading">Hive and Hut 8 pivot after Merge</h3>



Hive Blockchain Technologies said <a href="https://cms.blockworks.co/miners-hive-blockchain-technologies-hut-8-prep-for-ethereum-merge/" target="_blank" rel="noreferrer noopener">last week</a> it was analyzing mining other coins with its fleet of graphics processing units (GPUs).



“Anyone who’s mined with GPUs has been thinking about this from the start,” Long said. “What [ether miners] do have is a lot of power…just like bitcoin firms, so it’s just a case of being able to deploy the hardware quickly.”&nbsp;



Holmes said Thursday after the Merge that it has switched over to mining Ethereum Classic (ETC) and would be holding those assets amid what he expected to be a few weeks of “choppy waters.” The company is assessing other coins to mine, such as ravencoin (RVN).



<a href="https://www.coinwarz.com/mining/ethereum-classic/hashrate-daily-chart" target="_blank" rel="noreferrer noopener">The hash rate of ETC</a>, formed in 2016 as a result of The DAO hack, roughly tripled following the Merge to about 215 terahashes per second (TH/s), as of 3:00 pm ET, according to Coinwarz.com. <a href="https://www.coinwarz.com/mining/ethereum-classic/hashrate-daily-chart" target="_blank" rel="noreferrer noopener">RVN’s hash rate also saw big growth</a> Thursday, rising to 18.8 TH/s at that time. 



Hut 8 Mining CEO Jaime Leverton told Blockworks in an email the company is watching to see how proof-of-work digital assets will ultimately be affected. 


<div class="wp-block-image">
<figure class="alignright size-medium"><img loading="lazy" decoding="async" width="300" height="169" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Jaime-Leverton-Hut-8-Mining-CEO-1-300x169.png" alt="Hut 8 Mining CEO Jaime Leverton" class="wp-image-31633" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Jaime-Leverton-Hut-8-Mining-CEO-1-300x169.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Jaime-Leverton-Hut-8-Mining-CEO-1-300x169.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Jaime-Leverton-Hut-8-Mining-CEO-1-300x169.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Jaime-Leverton-Hut-8-Mining-CEO-1-300x169.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Jaime-Leverton-Hut-8-Mining-CEO-1-300x169.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Jaime-Leverton-Hut-8-Mining-CEO-1-300x169.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Jaime-Leverton-Hut-8-Mining-CEO-1-300x169.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Jaime-Leverton-Hut-8-Mining-CEO-1-300x169.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Jaime-Leverton-Hut-8-Mining-CEO-1-300x169.png?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/09/Jaime-Leverton-Hut-8-Mining-CEO-1-300x169.png?w=1600 1600w" sizes="(max-width: 300px) 100vw, 300px" /><figcaption>Hut 8 Mining CEO Jaime Leverton | DAS New York 2022</figcaption></figure></div>


“While Ethereum mining made up a very small portion of our operations, we are working with our mining pool as the hash rate migrates away from the Ethereum network to begin mining the next most profitable proof-of-work digital asset,” she added. “We have long been bullish on bitcoin and other proof of work assets, but we are also very committed to building out the infrastructure in our data centers to support the nascent blockchain and Web3 spaces.”



Hut 8’s 180 Nvidia GPUs that were mining ether are set to pivot to offer artificial intelligence, machine learning or visual effects rendering services.&nbsp;



<h3 class="wp-block-heading">Mining M&amp;A coming?</h3>



Long said the top ETH miners will survive, due to strong balance sheets and operations.&nbsp;



“I think there’s more of a challenge for the small, microcap miners who have more or less funded their businesses from scratch with debt and now maybe are struggling or only just making the debt payments,” he said. “And then they’ve got to figure out how to replace the hardware in a year or two from now, and you’re just on this endless treadmill.”



Eric Chen, CEO of Injective Labs, agreed a number of miners will likely struggle to evolve their operations, which could present a number of acquisition opportunities for larger players.&nbsp;



The executive added, however, that <a href="https://cms.blockworks.co/cryptos-equities-slide-as-traders-unpack-powells-jackson-hole-remarks/" target="_blank" rel="noreferrer noopener">hawkish rhetoric from the Federal Reserve</a>, coupled with what he called a “dismal” macro environment, has led to a major downfall in mergers and acquisitions (M&amp;A) activity across the board.



“The newer miners who have not lived through the past Ethereum fork will likely be impacted the most…due to their relative inexperience compared to the more veteran miner factions,” Chen said.&nbsp;



Crypto mining executives said during a panel at Blockworks’ Digital Asset Summit on Tuesday that M&amp;A may not be a good option for larger miners right now — despite smaller players potentially wanting to sell.&nbsp;



“What I’ve noticed is that most of the transactions that have happened…it’s about assets and it’s about horse trading as opposed to mergers,” Argo Blockchain CEO Peter Wall said during the panel.



He pointed to Riot Blockchain’s acquisition of Whinstone from Northern Data last year, as well as CleanSpark’s deal last week to buy a Georgia bitcoin mining facility from Mawson Infrastructure Group.



“All of us have baggage, all of us have management teams and some of us have debt,” Wall said. “And so if you’re able to acquire either infrastructure or rigs and leave out all the rest of the baggage, it becomes more interesting.”



But Leverton said that even asset-based deals with other firms can be “tricky,” as the price of machines has plummeted in recent months.&nbsp;



“There are more machines than we can possibly plug in in the next six to nine months,” she said. “If you paid $70 or $80 per tera hash for your equipment — and you’ve got some leverage on that — I’m not going to take your debt for overpriced machines, when I can just buy machines straight-up for $20 or $25 per tera hash.



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Ex-ETH Miner Hive Blockchain Eyes Buying Opportunities Post-Merge

<div id="highlights-block_631b650fdc58f" class="highlights">
 <ul>
 <li>Ex-global head of macro electronic trading at Morgan Stanley joins crypto liquidity provider B2C2</li>
 <li>Former Revolut and Coinbase pro jumps to Algorand Foundation</li>
 </ul>
 
</div>



Blockchain-based payments solutions provider Tassat hired a handful of executives, some of which join from large traditional financial firms.&nbsp;



Andre Frank, who was appointed as managing director of the New York-based firm’s <a href="https://interbanknetwork.com/" target="_blank" rel="noreferrer noopener">Digital Interbank Network</a>, recently worked at the London Stock Exchange as an executive management consultant. He also previously worked as chief operating officer of Thesys Technologies, the big data and market structure technology subsidiary of Tradeworx.



Formerly Tassat’s director of product development, <a href="https://www.linkedin.com/in/glendykam/" target="_blank" rel="noreferrer noopener">Glendy Kam</a> is now its chief product officer. Prior to Tassat, which is focused on b2b payments, she launched the API pilot program that supported JPMorgan’s blockchain initiative, <a href="https://www.jpmorgan.com/onyx/index">Onyx</a>.



<a href="https://www.linkedin.com/in/dan-wolff-123a55/" target="_blank" rel="noreferrer noopener">Dan Wolff</a>, Tassat’s new managing director for customer success, spent 20 years at fintech broker-dealer Liquidnet. <a href="https://www.linkedin.com/in/carolhartman/" target="_blank" rel="noreferrer noopener">Carol Hartman</a>, previously the CEO of Hartman Group Consulting, was hired as a managing director of business development.



<a href="https://www.linkedin.com/in/jack-rash/" target="_blank" rel="noreferrer noopener">Jack Rash</a> and <a href="https://www.linkedin.com/in/ned-thompson-mba-083b6210/" target="_blank" rel="noreferrer noopener">Ned Thompson</a> are now also managing directors of business development at Tassat. Rash formerly was a national sales manager at Fiserv. Thompson, an ex-vice president of global treasury solutions at Bank of America Merrill Lynch, also previously worked at Fidelity Investments and Santander Bank.&nbsp;



<a href="https://www.linkedin.com/in/tim-neill/details/experience/" target="_blank" rel="noreferrer noopener">Tim Neill</a> is now crypto infrastructure provider Copper’s new chief risk officer, a role he previously held at Mastercard.&nbsp;



The executive said in a statement that he seeks to help Copper “ensure institutional investors and asset managers can continue to transact and store cryptocurrencies transparently and securely.”



Neill joined Mastercard in 2018, according to his LinkedIn profile, working as chief risk officer for real-time payments and applications and head of risk for product management. He also previously held roles at London Stock Exchange Group, Standard Chartered Bank and Deutsche Bank.



Crypto trading platform Amber Group has cut as much as 10% of its workers so far this year as the bear market persists, Bloomberg reported Friday.  



<h3 class="wp-block-heading">Another Morgan Stanley exec defects to crypto</h3>



The Algorand Foundation appointed <a href="https://www.linkedin.com/in/deirdre-h-192077129/" target="_blank" rel="noreferrer noopener">Deirdre Halligan</a> as its chief operating officer to help the Algorand blockchain pursue entry into new markets and work with regulators to spur its mass adoption.



Halligan joins the organization from financial app Revolut, where she led global affairs, as well as wealth and trading. Prior to that, she was a COO for Coinbase Ireland and worked in the same role at e-commerce technology company eDesk.



&#8220;I&#8217;ve always sought work with bleeding-edge technologists [and] disruptors, and Algorand is the blockchain with the requisite speed, security, and low carbon footprint to deliver financial innovation at a global scale,&#8221; Halligan said in a statement.



Liquidity provider B2C2 hired <a href="https://www.linkedin.com/in/thomas-restout-b944b621/" target="_blank" rel="noreferrer noopener">Thomas Restout</a> as its CEO of Europe, the Middle East and Africa as the company reports more traditional finance firms committing resources to understanding and building products around digital assets.&nbsp;



Restout joins B2C2 from Morgan Stanley, where he was most recently global head of macro electronic trading and led crypto trading for the Wall Street giant’s fixed income division.&nbsp;



Crypto exchange Binance reportedly hired Henrique Meirelles, a former president of the Central Bank of Brazil and Minister of the Economy, as an advisory board member.&nbsp;



The hire was <a href="https://oglobo.globo.com/blogs/lauro-jardim/post/2022/09/henrique-mereilles-de-volta-a-iniciativa-privada.ghtml" target="_blank" rel="noreferrer noopener">reported</a> by Brazilian newspaper O Globo. Meirelles was president of Brazil’s central bank from 2003 to 2011.



Hive Blockchain Technologies hired <a href="https://www.linkedin.com/in/gabrielibghy/?originalSubdomain=ca" target="_blank" rel="noreferrer noopener">Gabriel Ibghy</a> as its general counsel after joining the company last year via acquisition as director of legal affairs.&nbsp;&nbsp;&nbsp;



A practicing attorney and a member of the Quebec Bar, Ibghy has legal experience in corporate and commercial litigation before all levels of various Canadian courts.



He was more recently the CEO of GPU.ONE, a data center owner and operator that Hive bought last year.&nbsp;



The announcement came the same day Hive revealed it has started analyzing mining other coins with its feet of graphics processing units (GPUs) ahead of Ethereum’s <a href="https://cms.blockworks.co/?s=merge" target="_blank" rel="noreferrer noopener">transition</a> from proof-of-work to proof-of-stake, and is implementing beta testing this week.&nbsp;



<h3 class="wp-block-heading">Rockstar co-founder goes Web3</h3>



<a href="https://www.linkedin.com/in/lmercurio/details/experience/" target="_blank" rel="noreferrer noopener">Laura Mercurio</a> is set to become the CEO of <a href="https://blockchainaustralia.org/" target="_blank" rel="noreferrer noopener">Blockchain Australia</a> on Sept. 12. She seeks to help the organization grow its membership base and work with government and regulatory agencies to shape the future of blockchain technology.&nbsp;&nbsp;



Mercurio previously spent six years at BlackRock, the world’s largest asset manager, from 2006 to 2012, and has also worked at Citigroup, Merrill Lynch and Deutsche Bank.



Meanwhile, Australia-based cryptocurrency brokerage Caleb &amp; Brown has hired three executives to help it expand its services to include fund management.



<a href="https://www.linkedin.com/in/tommyrogulj/" target="_blank" rel="noreferrer noopener">Tommy Rogulj</a> will lead the design, implementation and management of a crypto asset portfolio for sophisticated investors, the firm said Wednesday. <a href="https://www.linkedin.com/in/daniel-c-30a75a14/" target="_blank" rel="noreferrer noopener">Daniel Caruso</a> and <a href="https://www.linkedin.com/in/gary-head-046307149/" target="_blank" rel="noreferrer noopener">Gary Head</a> will help strengthen the company’s industry footprint and manage risk while working with the team to develop an institutional-grade model for investment in crypto assets.



Rogulj was most recently a portfolio manager and senior investment analyst for investment firm Spaceship, and also formerly worked at State Street, Russell Investments and AtlasTrend.&nbsp;



Caruso, who steps into the role of director of financial risk, previously led equity and securities finance solutions at Société Générale, Deutsche Bank and Morgan Stanley. Head, Caleb &amp; Brown’s strategic committee chair, is a partner at MST Financial and was formerly a senior adviser at Gresham Partners.



Dan Houser, the co-founder of Rockstar Games and the creative director behind the Grand Theft Auto series, joined the advisory board of blockchain game company Revolving Games.



The Web3 startup raised $25 million in a funding round led by Houser, along with Pantera Capital, Animoca Brands, Polygon, Dapper Labs, Permanens Capital Partners, Kenetic Capital, Sarmayacar and DWeb3 Capital.&nbsp;



Founded in 2020, Revolving Games is developing a Battlestar Galactica game and has a cooperative adventure game — called Skyborne Legacy — set to be released in October.



Back in the finance world: digital asset management consultant Sabre56 added <a href="https://www.linkedin.com/in/antoine-farris-0694362/" target="_blank" rel="noreferrer noopener">Antoine Farris</a> as its new head of corporate development and ventures.&nbsp;



Farris joins Sabre56 from family office Golden Vision Capital, where he worked as a managing director focused on venture stage and growth equity investments in the healthcare, consumer and technology segments.&nbsp;



He began his career in the technology, media and telecom group at Bear Stearns &amp; Co. and later held senior investment banking roles at Lazard and Rothschild.



<h3 class="wp-block-heading">In case you missed it</h3>



Digital bank ING’s former head of digital assets <a href="https://www.linkedin.com/in/herve-francois/" target="_blank" rel="noreferrer noopener">Hervé François</a> joined Investcorp to lead the alternative investment giant’s first blockchain-focused fund, <a href="https://cms.blockworks.co/former-ing-crypto-lead-to-helm-investcorps-first-blockchain-fund/" target="_blank" rel="noreferrer noopener">Blockworks reported Tuesday</a>.&nbsp;&nbsp;



Based in Abu Dhabi, François is set to work with early-stage startups involved in segments such as decentralized finance (DeFi), non-fungible tokens (NFTs) and blockchain infrastructure.



<a href="https://cms.blockworks.co/mysten-labs-300m-fundraise-values-business-at-more-than-2b/" target="_blank" rel="noreferrer noopener">Mysten Labs raised $300 million</a> as part of a Series B funding round that will help power more Web3 applications and speed up the adoption of its new blockchain.&nbsp;



The Web3 infrastructure company intends to hire dozens of professionals across engineering, marketing, partnerships, developer relations and product roles over the coming months, a spokesperson told Blockworks.



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Latest in Crypto Hiring: Morgan Stanley Exec Jumps Ship to Crypto

<div id="highlights-block_62d000428e097" class="highlights">
 <ul>
 <li>Riot Blockchain sold 300 of the 421 BTC it produced in June to help cover operational expenses</li>
 <li>Hut 8 Mining plans to continue growing its computing business that generates $1.6 million in revenue per month</li>
 </ul>
 
</div>



To hold or to sell — that is the question facing many cryptocurrency mining operations. Hut 8 is firmly taking the former approach.



Sue Ennis, Hut 8’s vice president of corporate development, told Blockworks that the company has no intention of selling its bitcoin any time soon.



The Canada-based company has 70 million CAD (about $53 million) on its balance sheet and an uncorrelated computing business generating 1.6 million CAD in revenue per month, Ennis noted. Unlike some competitors, she added, Hut 8 does not have large outstanding capital commitments for machines from orders made during the bull market.&nbsp;&nbsp;



“Last year and well into this year we have focused on how we can diversify our revenue and take a balance sheet-first approach to when we’re buying machines and at what price point we paid for machines, so that we didn’t have to be in a situation, if things went sideways, where we had to sell this very valuable finite asset that we’re all chasing,” she said.



Ennis said Hut 8 would most likely only consider selling bitcoin if the asset’s price jumps well above its all-time highs — pointing to bullish long-term estimates from JPMorgan analysts and Ark Invest CEO Cathie Wood of bitcoin <a href="https://cms.blockworks.co/jpmorgan-says-bitcoin-is-13-overvalued/" target="_blank" rel="noreferrer noopener">hitting $150,000</a> and <a href="https://www.barrons.com/articles/bitcoin-could-hit-500-000-according-to-ark-invests-catherine-wood-51605906264" target="_blank" rel="noreferrer noopener">$500,000</a>, respectively.&nbsp;



“At that point, maybe it would turn into sell a little bit, reinvest it back into the [computing] and Web3 side of our business,” she explained. “But again, we have no intention right now and no actual price point that we’ve got on our radar.”



Learn more: <a href="https://cms.blockworks.co/bitcoin-mining-economics-explained/">Is Bitcoin Mining Still Profitable? The Economics Explained</a>



Bitcoin’s price was about $19,700 at 8 am ET, down roughly 71% from its peak of nearly $70,000 last November.&nbsp;



While Hut 8 Mining seeks to hold its bitcoin for the foreseeable future and continue to grow its cloud computing business, other miners have sold or plan to sell BTC as the crypto downturn drags on.



<a href="https://cms.blockworks.co/crypto-miner-bitfarms-sells-half-its-bitcoin-to-reduce-debt-boost-liquidity/" target="_blank" rel="noreferrer noopener">Bitfarms revealed last month</a> that it had sold 3,000 BTC in a one-week span. Chief Financial Officer Jeff Lucas noted that the sales were the best and least expensive source of liquidity in the current market environment.&nbsp;



Texas-based <a href="https://cms.blockworks.co/tag/riot-blockchain/" target="_blank" rel="noreferrer noopener">Riot Blockchain</a> started selling a portion of its monthly bitcoin production in March. The company sold 300 of the 421 BTC it produced in June — gaining net proceeds of about $6.2 million — to help cover operational and other expenses. Riot held roughly 6,654 BTC, as of June 30.&nbsp;



The company continues progress on its 400 megawatt infrastructure expansion project at its Whinstone facility in Rockdale, Texas.



“It’s still important to us to have a strong bitcoin balance sheet, so we haven’t sold from the balance sheet per se,” Riot Blockchain CEO Jason Les told Blockworks, noting the firm has sold between 40% and 75% of its monthly bitcoin production. “There’s not a strict framework or policy around that. It’s a decision we are evaluating on a monthly basis.”



Compass Point Research &amp; Trading analysts Chase White and Joe Flynn said in a June 28 research note that while they expect Riot to take on new debt or sell more of its bitcoin output, “the company is well-positioned to weather the volatility in the BTC market given its lack of debt and substantial BTC holdings.”



Hive Blockchain Technologies said in a statement last week that during “challenging times in the market cycle,” its expansion plans will be funded through the selling of its current product of bitcoin and ether (ETH).



The company has been selling ether over the past year to expand its bitcoin footprint, as its ETH position sank from 25,000 ETH to 7,667 ETH. But Hive said in the July 7 update that it seeks to maintain its bitcoin inventory levels, which stood at 3,239 BTC on July 6.



<a href="https://cms.blockworks.co/tag/marathon-digital/" target="_blank" rel="noreferrer noopener">Marathon Digital</a>, which held 10,055 BTC as of June 30, has not sold any bitcoin since October 2020, Charlie Schumacher, the company’s vice president of corporate communications, told Blockworks.



“While we are long-term believers in bitcoin, our decision to continue to HODL is a strategic one, not necessarily a principle,” he said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Bitcoin is a tool that we can leverage. By holding it, we can increase our financial optionality.”</blockquote>



The mining company obtained a $100 million revolving line of credit, secured by bitcoin and USD, with Silvergate Bank last October.



“That being said, given that we produce BTC at a fairly healthy margin, it may make sense for us to sell a portion of our monthly bitcoin production as our production ramps [up] as needed to fund monthly operating costs,” Schumacher said.



<h3 class="wp-block-heading">Hut 8 growing its computing business</h3>



Though mining remains Hut 8’s core business — accounting for about 90% of its revenue — Ennis said the company will focus more on its cloud computing and Web3 business. Hut 8 has been gearing up to do so since last year, the executive added, noting that the current macroeconomic downturn did not drive the decision.&nbsp;



Ennis said that its computing business is on track to grow roughly 15% year over year as it seeks to serve more Web3 and blockchain-focused clients.



“Obviously the entire crypto industry has suffered, but at the end of the day, projects still need storage,” she said. “Projects still need security. Projects, especially in the blockchain gaming space, still need digital and render. So it is pretty sticky revenue regardless of what the macro economy is doing.”



Hut 8 acquired five data centers in Canada from wireless connectivity company TerraGo in January. The buy came after <a href="https://www.linkedin.com/in/jaime-leverton-she-her-3033a911/?originalSubdomain=ca" target="_blank" rel="noreferrer noopener">Jaime Leverton</a>, who has a background in data infrastructure transformation, took over as Hut 8’s CEO in December 2020.



Ennis <a href="https://cms.blockworks.co/bitcoin-miner-targets-gaming-web3-with-cloud-services-expansion/" target="_blank" rel="noreferrer noopener">told Blockworks in March</a> that Hut 8 is looking to provide an alternative to cloud computing giants such as Amazon Web Services, Google Cloud and Switch.



Hut 8 inherited government clients, as well as customers in media and entertainment and financial services using its cloud computing services. Though Ennis declined to disclose any new clients on the Web3 side, it has a nine-person sales team building a pipeline.&nbsp;



<h3 class="wp-block-heading">Mining consolidation coming soon?</h3>



Steve Russell, co-portfolio manager of Emerald Mutual Funds’ Finance and Banking Innovation Fund (HSSAX), <a href="https://cms.blockworks.co/qa-community-banks-moving-forward-with-crypto-plans-despite-downturn-portfolio-manager-says/" target="_blank" rel="noreferrer noopener">told Blockworks last week</a> that he expects a “shakeout” over the next year or so from which winners and losers in the mining space emerge.



White and Flynn wrote in their research note that lower BTC prices — they estimate averages of $21,500 and $34,000 in the second half of 2022 and all of 2023, respectively — will likely “put a lid” on global hash rate growth.



Ennis said mergers and acquisitions are something that has been on the company’s radar, particularly following the company’s $172 million raise last September.



“I think there’s still some pain to be had,” Ennis said of the sector’s companies.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“We’ve certainly seen miners selling to pay down their balance sheet and capital commitments for equipment, but we still think there’s still a way to go.”</blockquote>



Les said Riot Blockchain constantly looks at potential merger and acquisition deals.



“We think that with our strong, unlevered balance sheet, we are in a position to be opportunistic here,” he said.



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Crypto Mining Firms Take Different Approaches to Selling Bitcoin

Sebastian Sinclair

<div id="highlights-block_62c4d7f0d30b8" class="highlights">
 <ul>
 <li>Blockchain miner HIVE has 60 calendar days to submit a plan to Nasdaq on how it intends to get back on track with its annual filing requirements</li>
 <li>The miner missed its deadline last month, citing difficulties around a shorter filing time for non-venture issuers</li>
 </ul>
 
</div>



Publicly-traded crypto miner HIVE Blockchain Technologies said Monday it has received a letter from Nasdaq requesting the firm submit a plan to regain compliance under the exchange&#8217;s listing rules.



HIVE said it has received a Notification of Deficiency Listing issued by the exchange&#8217;s Qualifications Department following the miner&#8217;s <a href="https://cms.blockworks.co/blockchain-miner-hive-asks-canada-regulators-to-bar-execs-from-trading-stock%EF%BF%BC/" target="_blank" rel="noreferrer noopener">missed annual filings deadline</a> late last month.



Its letter comes as many of the industry&#8217;s top mining firms <a href="https://cms.blockworks.co/crashing-prices-expose-bitcoin-mining-industrys-addiction-to-leverage/" target="_blank" rel="noreferrer noopener">struggle to make ends meet</a> as a result of changing macroeconomic conditions, rising electricity costs and a lower bitcoin price. HIVE has not blamed any of those factors and said the missed deadline stems from a shorter filing deadline for non-venture issuers.



Learn more: <a href="https://cms.blockworks.co/bitcoin-mining-economics-explained/">Is Bitcoin Mining Still Profitable? The Economics Explained</a>



The Vancouver firm has 60 calendar days to submit its plan detailing how it intends to comply with Rule 5250(c)(1). Once the plan has been accepted in full, the miner has up to 180 calendar days from the due date of its annual Form-40F filing to regain compliance, HIVE said in a statement.



Under the rule, &#8220;a company shall timely file all required periodic financial reports with the commission through the EDGAR System or with the other regulatory authority,&#8221; according to the <a href="https://listingcenter.nasdaq.com/ViewPDF.aspx?Material_Search.aspx?mcd=CD&amp;cid=120,1,108,14,34,110,52,71,69&amp;years=2018,2017,2016,2018,2017,2016,2015,2014,2013,2012,2011,2010,2009,2008,2007,2006,2005,2004,2003,2002&amp;sub_cid=&amp;searchkeywords=&amp;exactsearchddvalue=1&amp;Print=N&amp;materials=0&amp;popularfl=#:~:text=Rule%205250(c)(1)%3A%20A%20Company%20shall%20timely,with%20the%20Other%20Regulatory%20Authority." target="_blank" rel="noreferrer noopener">exchange&#8217;s website</a>.



Last month, HIVE said it would miss its June 29 deadline for the fiscal year ended March 31 by more than two weeks and is expected to file come July 15. Its filing includes audited financial statements, chief executive and chief financial officer certifications and management discussion, as well as analyses.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" src="https://flo.uri.sh/visualisation/10555406/embed#?secret=gJKOz5hbyG" data-secret="gJKOz5hbyG" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div></figure>



HIVE clocked more than $68 million in revenue with a net profit exceeding $64 million for the third quarter of last year, according to the company&#8217;s recent <a href="https://www.hiveblockchain.com/medias/uploads/2021_12-31_HIVE_FS_FINAL.pdf" target="_blank" rel="noreferrer noopener">financial statements</a>.



As a result of the delay, HIVE has asked regulators across all provinces and territories of Canada to issue a <a href="https://cms.blockworks.co/blockchain-miner-hive-asks-canada-regulators-to-bar-execs-from-trading-stock%EF%BF%BC/" target="_blank" rel="noreferrer noopener">temporary order</a> inhibiting directors, officers and insiders from trading in HIVE equities.



At the time, the firm blamed a “combination of factors,” including a shorter filing deadline for non-venture issuers, a rapid increase in the company’s growth and an increase in the number of transactions resulting from that growth.



HIVE&#8217;s share price tumbled more than 10% following the announcement of its failure to meet its annual filing deadline, from $3.43 (4.42 Canadian dollars) to $3.08. The miner&#8217;s share price has since recovered, up nearly 14% on the day, from $2.94 to $3.38. Year to date, HIVE&#8217;s share price is down more than 76%.





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Blockchain Miner HIVE Receives Letter of Deficiency from Nasdaq

<div id="highlights-block_62bcde198fccc" class="highlights">
 <ul>
 <li>The crypto miner said it would miss its annual filings deadline by more than two weeks</li>
 <li>As a result of the delay, HIVE has asked securities regulators across Canada to bar certain employees from trading in its stock</li>
 </ul>
 
</div>



Publicly traded crypto miner HIVE Blockchain Technologies on Wednesday asked securities watchdogs in Canada to bar executives from trading in the company&#8217;s stock due to a delay in its financial statements.



HIVE — a&nbsp;crypto mining firm utilizing hydroelectric power across Canada, Sweden and Iceland — is expected to file its annual filings for the fiscal year by July 15 instead of the originally expected date of June 29.



Audited financial statements, chief executive and chief financial officer certifications and management discussion, as well as analysis, make up the majority of HIVE&#8217;s annual filings.



As a result of the delay, HIVE is asking regulators across all provinces and territories of Canada to issue a temporary order inhibiting directors, officers and insiders from trading in HIVE equities. Once the filings are finalized, the prohibition against company employees is expected to lift.



HIVE&#8217;s share price has since tumbled more than 10% on the day from 4.42 Canadian dollars ($3.43) to $4.01 Canadian dollars, exchange data show.



The firm is blaming a &#8220;combination of factors,&#8221; including a shorter filing deadline for non-venture issuers, a rapid increase in the company’s growth and an increase in the number of transactions resulting from that growth.



&#8220;The company does not anticipate such difficulties with future filings and has made arrangements to satisfy the shorter filing periods for future year-ends, including hiring additional finance staff,&#8221; HIVE said in a statement.



Founded in 2013, HIVE went public in 2017 via the Toronto Stock Exchange, and, at the time, touted itself as the first crypto mining company with a &#8220;green energy and ESG strategy&#8221; to do so. The company recently sold roughly 10,000 ether in a bid to scoop up Intel&#8217;s bitcoin mining rigs amid <a href="https://cms.blockworks.co/crashing-prices-expose-bitcoin-mining-industrys-addiction-to-leverage/" target="_blank" rel="noreferrer noopener">declining prices</a> in a contracting crypto market.



HIVE said it intends to provide updates on a bi-weekly basis, in accordance with national policy, until the filings are completed.



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Blockchain Miner HIVE Asks Canada Regulators To Bar Execs From Trading Stock

<div id="highlights-block_61ae3d8c27a91" class="highlights">
 <ul>
 <li>Hut 8 Mining, Riot Blockchain, Marathon Digital and HIVE Blockchain Technologies held nearly 19,000 bitcoin combined at the end of November</li>
 <li>Riot Blockchain recently bought ESS Metron, while Marathon Digital expanded its agreement with Compute North to host more than 100,000 of its bitcoin miners</li>
 </ul>
 
</div>



Crypto miners continue to hold the bitcoin they are producing, and some have plans to grow their businesses even more to continue building reserves.&nbsp;



Some of the largest such companies in North America — Hut 8 Mining, Riot Blockchain, Marathon Digital and HIVE Blockchain Technologies — now hold roughly 18,940 bitcoins combined. The businesses continue to expand their operational footprints in an effort to increase their production capacities.



Other companies, such as Celsius Network, are looking to catch up. Celsius started its bitcoin mining business last year as a way to diversify its sources of yield, and announced an <a href="https://cms.blockworks.co/celsius-to-invest-additional-300m-in-bitcoin-mining/" target="_blank" rel="noreferrer noopener">additional $300 million investment</a> into its mining capabilities last month.    



<h3 class="wp-block-heading">Hut 8 Mining</h3>



Hut 8 Mining mined 265 bitcoins in November, an average of nearly nine per day, the company revealed. The total last month was up from 249 bitcoins mined in October and slightly lower than its output of 273 the month prior.



The Canada-based miner is keeping all of its mined bitcoin as part of its <a href="https://cms.blockworks.co/marathon-digital-hut-8-mining-building-up-bitcoin-reserves/" target="_blank" rel="noreferrer noopener">broader “hodl” strategy</a>, the firm noted in a December 2 announcement. Its reserves total 5,242 bitcoin, as of November 30, and about 2,000 of its bitcoins are earning yield, according to the firm.



The value of Hut 8’s reserves as of Monday at 12 Noon ET — when bitcoin was priced at about $49,100 — was roughly $257 million.



Hut 8, in November, completed the deployment of NVIDIA chips at the company’s site in Medicine Hat, Alberta. The NVIDIA cryptocurrency mining processors mine the Ethereum network via Luxor pool and are receiving payouts in bitcoin, which equate to about two additional bitcoin per day.&nbsp;



The company currently has an installed hashrate of approximately 1.7 exahash per second (EH/s). The company is on track to meet its goal of between 2.5 EH/s and 3 EH/s by the end of the year, a representative told Blockworks, and looks to reach 6 EH/s by the middle of 2022.&nbsp;



The development of Hut 8’s <a href="https://www.newswire.ca/news-releases/hut-8-mining-announces-third-site-status-update-846652660.html" target="_blank" rel="noreferrer noopener">third mining site</a> in North Bay, Ontario, is under way, the spokesperson added. The facility, expected to be ready by the end of the year, will begin with 35 megawatts of capacity.



<h3 class="wp-block-heading">Riot Blockchain</h3>



Colorado-based Riot Blockchain produced 466 bitcoin in November, bringing its year-to-date total to 3,387 BTC — roughly a 260% increase over its bitcoin production over the same period last year.



Riot held 4,464 bitcoins, all produced by its mining operations, as of November 30. It has a deployed fleet of 29,095 miners with a hashrate capacity of 3 EH/s.&nbsp;



The company has increased its 2022 estimated hashrate capacity to 9.0 EH/s due to a recent $33 million purchase order with Bitmain for 3,000 of its latest miner model S19XP. The delivery and deployment of these machines is expected in the second half of 2022.



Riot also announced last week that it bought ESS Metron, which designs and produces electrical equipment solutions, many of which the acquirer said are critical to deploying bitcoin mining operations at scale.



Denver-based ESS Metron has facilities that total 121,000 square feet, and the company is a key supplier to Riot’s Whinstone facility in Rockdale, Texas.



“Riot’s strategic positioning across the electrical supply chain is significantly enhanced as the company will benefit from ESS Metron’s existing relationships with leading electrical suppliers globally,” Riot CEO Jason Les said in a statement. “In addition, Riot will continue its fast-tracked expansion project as the company benefits from internalizing ESS Metron’s engineering and industry expertise.”&nbsp;



<h3 class="wp-block-heading">Marathon Digital</h3>



Marathon Digital, a bitcoin miner based in Las Vegas, is also focused on growth.&nbsp;



The company mined 196 bitcoins in November, which was down from 417.7 bitcoins in October. The sharp decrease reflects maintenance and upgrades to its power generating station in Hardin, Montana.



The miner’s existing mining fleet consists of 31,000 active miners producing roughly 3.2 EH/s. It has produced 2,712 bitcoins in the first 11 months of 2021, bringing its bitcoin holdings total to 7,649.&nbsp;



The company last sold bitcoin in October 2020, and since then, has been accumulating all the bitcoin it generates.



“I think all miners believe that the price of bitcoin will go up, and by not selling bitcoin, we essentially cause the price to go up somewhat,” Marathon Digital CEO Fred Thiel <a href="https://cms.blockworks.co/marathon-digital-hut-8-mining-building-up-bitcoin-reserves/" target="_blank" rel="noreferrer noopener">previously told Blockworks</a>. 



Marathon received about 15,500 ASIC miners from Bitmain in November, bringing its year-to-date total to 57,000 miners. An additional 8,477 miners are currently in transit, the firm reported.



The company recently expanded its agreement with Compute North to host more than 100,000 of Marathon’s previously purchased bitcoin miners at multiple locations, including wind and solar farms across the US.



The news follows Marathon announcing its intention in May for Compute North to host roughly 73,000 of Marathon’s bitcoin miners in Texas.



Once all 133,000 of Marathon’s bitcoin miners are deployed, the company’s hash rate will be approximately 13.3 EH/s, its blended cost of electricity and hosting will be approximately $0.042 per kilowatt-hour, and Marathon’s mining operations will be approximately 77% carbon-neutral.\



<h3 class="wp-block-heading">HIVE Blockchain Technologies</h3>



Vancouver-headquartered HIVE Blockchain Technologies produced 218 bitcoins in November and held a total of 1,584 as of the end of the month.&nbsp;



“We are very pleased to report HIVE has continued its strong momentum following our record-breaking October production figures,” HIVE Executive Chairman Frank Holmes said in a statement. “This trend is continued in our November production, where HIVE is again generating over $280 million in annual revenue on a run-rate basis using November figures.”



HIVE also mined 2,334 ether in November, as the company stated in a December 3 news release that it believes its unique position of having a large bitcoin and Ethereum mining footprint provides investors a unique value proposition.



MicroStrategy CEO Michael Saylor, an outspoken proponent of bitcoin, <a href="https://cms.blockworks.co/michael-saylor-bitcoin-is-a-trillion-dollar-opportunity-for-tech-giants/" target="_blank" rel="noreferrer noopener">said in July</a> that there’s a “land grab” to acquire as much bitcoin as possible, noting the ultimate maximum of 21 million that will one day be in circulation. The company’s <a href="https://cms.blockworks.co/microstrategy-announces-new-414-4m-bitcoin-buy/" target="_blank" rel="noreferrer noopener">latest bitcoin buy</a> was 7,002 bitcoins at an average price of $59,187, according to Saylor. MicroStrategy now holds about 121,000 bitcoins acquired for nearly $3.6 billion — an average price of about $29,500.



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