Shalini Nagarajan

Hindenburg Research is known for revealing corporate fraud and is notorious for betting against electric truckmaker Nikola in 2020, so it’s surprising that it found no such cases within the crypto space in one of the most scandalous years for the industry. 



On its website, Hindenburg says it looks for “man-made disasters floating around in the market and aim to shed light on them before they lure in more unsuspecting victims.”



The research firm, founded by chartered financial accountant <a href="https://www.linkedin.com/in/nathanzanderson/" target="_blank" rel="noreferrer noopener">Nathan Anderson</a>, says it hunts for accounting irregularities, bad actors in management and unethical business practices.



Hindenburg’s exposure of <a href="https://hindenburgresearch.com/nikola/" target="_blank" rel="noreferrer noopener">Nikola</a> contributed to a 90% plunge in the electric vehicle maker’s stock price and the collapse of its founder Trevor Milton. And just last week, the firm announced a short position in Indian conglomerate Adani Group, calling it “the largest corporate fraud in history,” and <a href="https://www.reuters.com/markets/deals/indias-adani-enterprises-calls-off-share-sale-source-says-2023-02-01/" target="_blank" rel="noreferrer noopener">wiping off billions</a> in market value from seven of its listed companies.&nbsp;



<h2>Hindenburg mostly skipped crypto-related fraud</h2>



Hindenburg might have had some juicy targets in the form of the biggest crypto blow-ups of 2022, including Three Arrows Capital, Celsius, Voyager and FTX.&nbsp;



Acting as the cop in the digital currency ecosystem takes on different dynamics considering the advanced technical resources and expertise that are required, according to one industry observer.&nbsp;



“That [Hindenburg] did not uncover FTX&#8217;s greed prior to its bankruptcy cannot be held against the firm. FTX blindsided everyone, even the top security platforms that are dedicated to the nascent industry,” Simon Schaber, Spool DAO’s chief business development officer.



“In reality, the crypto ecosystem operates in a way that may be alien to most investigators, and unless there is a direct whistleblower who shares insights into a firm’s operational inconsistencies, companies like Hindenburg Research will have little or nothing to work with.”



But there are several crypto companies that Hindenburg has gone after.



<h2>Crypto miner Riot Blockchain</h2>



Riot Blockchain has been called out by the fraud-exposer at least thrice, publicly anyway. The first instance was in December 2017, when it <a href="https://hindenburgresearch.com/riot-blockchain-sudden-business-pivot-suspicious-acquisitions-questionable-special-dividend/" target="_blank" rel="noreferrer noopener">pointed out</a> that Riot went from being a “life science tool” to a self-described leader in the blockchain industry.



Indeed, in October 2017, biotech company Bioptix <a href="https://www.prnewswire.com/news-releases/bioptix-changing-name-to-riot-blockchain-as-company-shifts-focus-to-strategic-investor-and-operator-in-blockchain-technologies-300530737.html" target="_blank" rel="noreferrer noopener">changed its name</a> to Riot Blockchain due to a pivot in the company’s business direction. The firm originally began operations in 2000 with the aim to develop products used in a blood test that evaluated acute appendicitis. But the change in business strategy saw its shares <a href="https://www.theglobeandmail.com/globe-investor/investment-ideas/bioptix-shares-surge-after-rebranding-to-riot-blockchain/article36491746/" target="_blank" rel="noreferrer noopener">nearly double</a>.



Hindenburg alleged that the company handed out a “special cash dividend” that sapped 63% of its cash by giving it away to company insiders. It also noted an individual with a controversial past, Barry Honig, had an “influential behind-the-scenes stake” in Riot.



Another <a href="https://seekingalpha.com/article/4136235-riot-blockchain-this-crypto-clown-car-continues-hurtling-toward-abyss" target="_blank" rel="noreferrer noopener">Hindenburg report</a> in January 2018 raised flags after filings showed Riot frequently shuffled its auditors.



And a month later, Hindenburg <a href="https://hindenburgresearch.com/riot-blockchain-yet-another-suspicious-cash-depleting-transaction/" target="_blank" rel="noreferrer noopener">alleged</a> that Riot spent six times more than it should have on equipment brought from a highly suspicious new entity, and revealed it had a short position on the company.



“We have seen a lot of ridiculous things in our day, but we believe Riot has engaged in some of the most brazen activity we have seen in a U.S. listed equity,” Hindenburg said.



<h2>China-based crypto firm Ebang</h2>



Hindenburg <a href="https://hindenburgresearch.com/ebang/" target="_blank" rel="noreferrer noopener">revealed</a> its short position on Chinese bitcoin mining machine producer Ebang in April 2021. 



Describing Ebang as a “China Hustle,” it said the company engaged in opaque deals with company insiders and once sent $21 million to a relative of its Chairman and CEO, among a string of other allegations.



“Ebang is yet another cautionary tale for inexperienced retail investors enthused by anything crypto-related. As is so common with other ridiculous China-based schemes, the company will likely keep selling shares as long as investors are willing to keep buying them. We think this is a clear one-way street, and the capital isn’t coming back,” it said.



<h2>Stablecoin issuer Tether</h2>



In October 2021, Hindenburg offered a whopping <a href="https://hindenburgresearch.com/tether/" target="_blank" rel="noreferrer noopener">$1 million bounty</a> to anyone who offered information on the reserves backing its stablecoin. 



The short-seller’s claims about Tether’s disclosures being opaque came right after the US Commodity Futures Trading Commission fined the stablecoin issuer $21 million over misleading statements.



Hindenburg has doubts about the legitimacy of Tether’s backing due to the company’s sparse disclosures,” it said.



A Tether spokesperson described the bounty offered as a stunt and “a pathetic bid for attention.”



They are attempting to discredit not just Tether, but an entire movement. Thankfully, everyone sees through their opportunism,” Tether told Blockworks.



Read more: <a href="https://blockworks.co/news/what-backs-tether-58-us-treasurys-and-a-mess-of-other-stuff">What Backs Tether? 58% US Treasurys and a Mess of Other Stuff</a>



“This is not the first time Hindenburg Research has orchestrated an alleged scheme in pursuit of profit. Nor will it be the last. Tether abhors and denounces their actions and transparent motives,” they added.



Hindenburg didn’t reply to a query seeking comment on whether it has so far received enough information to warrant paying out the $1 million bounty. Blockworks has also reached out to Riot and Ebang, but has yet to receive a response.



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

3 Crypto Companies Hindenburg Research has Named and Shamed

David Canellis

Insiders at public crypto companies have bought millions of dollars worth of their own stocks since FTX crumpled last November — an event which sent the price of bitcoin spiraling 25%.



Coinbase director Tobias Lütke, perhaps better known as the CEO of Canadian ecommerce giant Shopify, has led the charge. He’s been busy buying the Coinbase dip, spending $4.86 million on the stock over the past three months, per SEC filings.



Lütke has snapped up nearly 110,000 <a href="https://blockworks.co/tag/coinbase">Coinbase</a> shares in that time for an average price of $44.37. COIN traded for about $60 on Friday afternoon, which means he’s up 35% on his recent haul.&nbsp;



As Blockworks previously reported, Lütke has been regularly buying Coinbase stock, spending upwards of $350,000 practically every single week since August.



<ul>
<li>Lütke joined Coinbase’s board of directors in January 2022, when its shares were worth more than $200 a piece.</li>



<li>In total, he has acquired just under 172,000 Coinbase shares for about $9.3 million, at an average price of $54.30.&nbsp;</li>



<li>His total haul is currently worth more than $10.3 million — his dip buying has, so far, paid off.</li>
</ul>



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/12569721/embed#?secret=ERGFPbJboS" data-secret="ERGFPbJboS" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Chart by David Canellis</figcaption></figure>



Three insiders at major <a href="https://blockworks.co/tag/marathon-digital">bitcoin miner Marathon</a> have also recently backed their own stocks. Directors Douglas Mellinger and Kevin DeNuccio respectively spent $104,000 and $339,000 on Marathon shares throughout December.&nbsp;



Marathon CEO Fred Thiel himself plonked around $19,000 on 5,000 shares; altogether those three execs bought stock at an average price of $4.40. Marathon now trades for $8.18, which means they’ve collectively gained 86% — another win for the dip buyers.



CleanSpark Chief Financial Officer Gary Vecchiarelli grabbed $34,500 or 19,400 shares at $1.78 apiece in mid-December. CLSK is now at $2.90; Vecchiarelli is up 63%, lodging more than $21,000 in paper gains.



Altogether, these insiders spent $5.35 million buying the dip on their own stocks since the start of November. That same cache is now worth $7.48 million — a 40% gain.



<h3>Others insiders tapped out at local lows</h3>



Coinbase CEO Brian Armstrong is the yin to Lütke’s yang. While the Shopify CEO has relentlessly bought COIN, Armstrong has been busy fulfilling his pledge to offload 2% of his company stake.&nbsp;



Armstrong has dumped $8.57 million in Coinbase stock since the start of November (often coinciding with exercised options), most recently $4.55 million on Jan. 13. He’s overall sold more than 178,000 shares for $48.05 a pop, on average.&nbsp;



Coinbase stock is up 25% from that price point. He previously pledged to funnel that cash into science and tech projects, such as life extension unit NewLimit, which he co-founded last September.



Coinbase General Counsel Paul Grewal, CFO Alesia Haas, and Chief Accounting Officer Jennifer Jones also sold the dip, cashing in more than $15.8 million in COIN since Nov. 1. Haas is responsible for the lion’s share of the selling between the three, hitting an average price of $40.16. 



Had Haas waited until now to sell her stock, they would’ve generated an additional $7.75 million — a prime example of selling the dip gone wrong. (Almost all trades cited were made in accordance to pre-set trading plans lodged with the SEC in the months prior.)



<ul>
<li>Chad Harris, chief communications officer at bitcoin mining stock Riot, sold 75,565 shares for $4.15 a piece to generate around $313,600 in the first week of December.&nbsp;</li>



<li>RIOT now trades for $6.26, so Harris missed out on about $160,000.</li>



<li>General Counsel William Jackman sold 25,000 shares for $100,000 for $4 each — the same amount would fetch nearly $157,000 today.</li>
</ul>



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/12570072/embed#?secret=L3kuzXNROI" data-secret="L3kuzXNROI" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Chart by David Canellis</figcaption></figure>



<a href="https://blockworks.co/tag/riot-blockchain">Riot Blockchain</a> Director Lance D’Ambrosio sold too, getting rid of shares worth $166,100. Tyler Page, CEO at rival firm Cipher Mining, joined in, giving up 35,000 shares at $0.82. The stock now trades at $1.46 — 78% above that price point.



But by far the most active sellers are a string of executives at Block, the payments firm behind Cash App formerly known as Square, founded by <a href="https://blockworks.co/tag/jack-dorsey">bitcoin bull Jack Dorsey</a>.&nbsp;



Block executives have altogether sold roughly $25.5 million in company stock since the start of November.&nbsp;



Square Lead Alyssa Henry, who joined the firm from Amazon back in 2014, made up 95% of those sales, selling more than 373,000 shares for $64.92 on average. SQ trades for $85.43 today, meaning Henry has effectively left $7.65 million on the table.



Other SQ insiders to offload stock over the dip include CFO Amrita Ahuja, CAO Ajmere Dale, Cash App Lead Brian Grassadonia and Chief Legal Officer Sivan Whiteley.



Our selling insiders collectively sold $50.5 million during their companies’ dips, but if sold today, they would’ve raked in $68.75 million.



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

Crypto Execs Bought the Dip on Their Own Stocks — They’re Up 40%

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.



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

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

Crypto stocks surged into Wednesday’s close as Coinbase reached a settlement agreement with regulators — and also on the heels of the latest US jobs data and minutes from an influential division of the Federal Reserve.&nbsp;



While one analyst described the minutes from last month’s Federal Open Market Committee meeting as “hawkish,” another said Wall Street is getting more confident that the agency’s tightening path could be ending very soon.



The gains came after crypto stocks <a href="https://blockworks.co/news/crypto-stocks-tanked-2022">tanked in 2022</a> as near-record inflation, and the Federal Reserve’s interest rate hikes and geopolitical conflicts weighed on equities across sectors.



Silvergate Capital (SI) surged about 27% on the day before accounting for after-hours trading.&nbsp;



The spike came despite Silvergate’s high short float, which accounts for more than half of its traded shares, The Wall Street Journal <a href="https://www.wsj.com/livecoverage/stock-market-news-today-01-04-2023/card/silvergate-coinbase-get-a-crypto-rally-YgkZGsw6Sunr5qXIVvG8" target="_blank" rel="noreferrer noopener">reported</a>.



Other crypto stocks that booked substantial Wednesday gains: crypto miners <a href="https://blockworks.co/tag/marathon-digital">Marathon Digital</a> (MARA, up 24%) and <a href="https://blockworks.co/tag/riot-blockchain">Riot Blockchain</a> (RIOT, up 15%).&nbsp;



The double-digit gains for the bitcoin mining operators seem to be driven by a macro short squeeze in small- and mid-size capitalization equities, according to Chase White, a senior research and policy analyst at Compass Point Research &amp; Trading.



“We’re not hearing any specific rhyme or reason, and volumes are light, so it seems low conviction,” White told Blockworks. “Many of the miners have very high — [15-plus %] short interest, so they would be the biggest beneficiaries of a squeeze.”



<a href="https://blockworks.co/tag/microstrategy" target="_blank" rel="noreferrer noopener">MicroStrategy</a>, the largest publicly traded bitcoin owner, was up about 14%. 



Coinbase railled, too, settling up 12% through 4 pm ET. The crypto exchange’s shares rose after it <a href="https://blockworks.co/news/coinbase-stock-up-after-settlement">agreed to settle</a> for $100 million with New York regulators in response to anti-money laundering and compliance violations. &nbsp;



<h3>Jobs data, Fed minutes released</h3>



The surges came as the number of job openings in the US tallied 10.5 million at the end of November, the US Bureau of Labor Statistics reported, representing an incremental change from the month prior. The number was higher above the 10 million forecast by FactSet.



The number of hires and total separations also remained relatively flat at 6.1 million and 5.9 million, respectively.&nbsp;



“The jobs data might have added a bit of a bump early, but not a big enough data point in the face of a hawkish Fed,” White said.&nbsp;



Minutes published Wednesday of the Fed’s Federal Open Market Committee for Dec. 13 and 14 indicated “expectations for the committee to maintain elevated policy rates through 2023.”



Inflation was still well above the committee&#8217;s longer-run goal of 2 percent due to supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures, according to the minutes.&nbsp;&nbsp;



“Participants concurred that the inflation data received for October and November showed welcome reductions in the monthly pace of price increases, but they stressed that it would take substantially more evidence of progress to be confident that inflation was on a sustained downward path,” the minutes said.



After a <a href="https://blockworks.co/news/cryptos-stocks-rally-on-fourth-straight-0-75-interest-rate-increase">streak of 75 basis point rate increases</a> dating back to June, the Fed <a href="https://blockworks.co/news/fed-ends-0-75-streak-opts-for-lower-rate-increase-in-december">dropped its rate hike</a> to half a percentage point last month.



“Crypto assets are rallying as Wall Street is growing confident that the Fed’s tightening path could be ending very soon,” Edward Moya, senior market analyst with OANDA, told Blockworks. “The most beaten up interest rate-sensitive stocks are forming a bottom and that is great news for Microstrategy, Marathon Digital, and Riot.”



The Fed <a href="https://blockworks.co/news/fed-ftx-doesnt-pose-broader-risk">also acknowledged</a> that, while FTX’s failure has resulted in significant spillover to digital asset markets more broadly, its “collapse was not seen as posing broader market risks to the financial system.”



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

Crypto Stocks Surge to Double-digit Daily Gains

It’s no secret crypto miners are struggling, and more casualties are expected next year.



But as the bear market trudges on, not all companies in the segment face dire circumstances, industry watchers said, as some may even come out stronger.&nbsp;



Core Scientific <a href="https://blockworks.co/news/compute-norths-business-goes-south" target="_blank" rel="noreferrer noopener">filed for bankruptcy</a> last week after saying in October it would <a href="https://blockworks.co/news/core-scientific-stock-price-plummets-70-as-it-considers-bankruptcy" target="_blank" rel="noreferrer noopener">skip upcoming payments</a> on several loans. The Texas-based miner’s filing came after data center operator Compute North lodged its own <a href="https://blockworks.co/news/compute-norths-business-goes-south" target="_blank" rel="noreferrer noopener">bankruptcy</a> in September.



Bitcoin is down about 75% from its all-time high reached in Nov. 2021, making mining less lucrative for companies that <a href="https://blockworks.co/news/crashing-prices-expose-bitcoin-mining-industrys-addiction-to-leverage" target="_blank" rel="noreferrer noopener">took on debt</a> to accelerate growth operations during the bull market. 



“This coupled with the massive downward crash the whole sector has seen this year is undoubtedly putting extra financial strain on miners,” Louise Abbott, a cryptocurrency and asset recovery partner at Keystone Law, told Blockworks in an email.&nbsp;



“Combined with the lack of confidence with investors purchasing less, casualties in the mining sector in the first half of 2023 are expected.”&nbsp;



In addition to the struggles of Core Scientific and Compute North, London-based Argo Blockchain <a href="https://blockworks.co/news/argo-bankruptcy-still-on-the-table" target="_blank" rel="noreferrer noopener">said</a> earlier this month it was looking to avoid bankruptcy despite holding “insufficient cash” to sustain operations for much longer. 



Iris Energy is also <a href="https://blockworks.co/news/crypto-miners-mulling-options-as-downturn-weighs-heavily" target="_blank" rel="noreferrer noopener">seeking to stay afloat</a>. Its two potential paths forward include expanding its self-mining from 2 exahashes per second (EH/s) to 5.4 EH/s — its preferred strategy — or third-party hosting. Iris Energy co-founder Daniel Roberts called the latter option “a backstop” during a company update earlier this month. 



“I cannot give you a clear answer on where we’ll be in the next week or month or even three months,” Roberts said at the time.&nbsp;



Mining firm Greenridge recently entered a non-binding agreement <a href="https://blockworks.co/news/bitcoin-miner-to-sell-rigs-worth-60m-to-cover-nydig-debt" target="_blank" rel="noreferrer noopener">to settle a $74 million debt</a> with NYDIG. Greenidge said in a statement it planned to offload mining equipment to crypto-focused financial services firm — reducing the loan by up to 90%.



Fred Thiel, CEO of Marathon Digital, declined to speculate on how many more miners could go bankrupt in the coming months. But, he told Blockworks, those that used equipment financing to fund growth are likely to continue facing headwinds.



“If these market conditions persist through the middle of next year, there will likely be significant attrition in the number of miners that remain viable,” Thiel said.&nbsp;



<h3>Opportunities for healthier miners</h3>



The overleveraged bitcoin miners are the ones who will feel the most heat in 2023, said Andy Long, CEO of bitcoin miner White Rock Management. Buying newer, more efficient mining hardware in quantity at historically low prices will pay off for some, he added.



“Miner capitulation will start to slow down next year, but there is likely still more to come before we turn the corner,” Long told Blockworks. “Miners who have prepared for the volatility and who have strong balance sheets will have a great opportunity to capitalize on the bear market.”



Thiel said that Marathon Digital’s primary focus in 2023 is hitting a hash rate of 23 EH/s by the middle of the year. Marathon’s hash rate, as of the end of November, was 7 EH/s.



The Marathon CEO has also said it could look to expand to international markets and is evaluating various renewable energy opportunities.



As far as potential buying opportunities, Thiel had said earlier this month the company was evaluating whether it could buy assets from Compute North.



“We opted not to purchase any assets from Compute North, and we&#8217;re not currently looking to buy any sites that are under development,” Thiel said. “That being said, we&#8217;re keeping an eye on the market and how things develop to determine if there might be something of value to Marathon and our shareholders.”



Riot Blockchain is another quickly expanding company <a href="https://blockworks.co/news/riot-blockchain-ceo-firm-is-one-of-mining-spaces-best-positioned-acquirers" target="_blank" rel="noreferrer noopener">seeking buying opportunities</a> during the downturn. It seeks to grow its current hash rate capacity of 7.7 EH/s to 12.5 EH/s by the first quarter of 2023.



Michael Venuto, a portfolio manager of Amplify Investments’ Transformational Data ETF (BLOK), <a href="https://blockworks.co/news/crypto-etfs-sank-in-2022" target="_blank" rel="noreferrer noopener">said</a> the miner he is highest on is Riot, given that it has no debt. 



A liquidation of Core Scientific could be good news for firms with a wider risk spread that are able to snatch assets at a reduced rate, Abbott said.



A Riot spokesperson did not return a request for comment.



Abbott added that the bankruptcy of FTX and security breaches highlight a “desperate” need for more regulation, which will help miners weather the crypto winter. 



“Ultimately, if the whole sector has more security, the miners will benefit; if people are not investing, the miners will be affected,” she said. “Regulation will add protection to promoting products, corporate governance and investor protection, amongst other things.”



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

Expect More Bitcoin Miners To Go Bankrupt in 2023

<div id="highlights-block_634d9f6881df4" class="highlights">
 <ul>
 <li>Riot Blockchain seeks to more than double its current capacity to 12.5 exahashes per second by the first quarter of 2023</li>
 <li>Closer relationships between bitcoin miners and energy grids will be critical for the space going forward, CEO says</li>
 </ul>
 
</div>



Riot Blockchain is one of the “best-positioned acquirers” in the mining space, the company’s CEO said — a segment many say is primed for consolidation during the crypto winter.



But Riot’s CEO Jason Les said that the company is not necessarily seeking out scale in potential deals, as it is busy fulfilling its own expansion.&nbsp;&nbsp;


<div class="wp-block-image">
<figure class="alignright size-medium"><img decoding="async" loading="lazy" width="300" height="300" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/10/Riot-Blockchain-CEO-Jason-Les--300x300.png" alt="" class="wp-image-34691" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/10/Riot-Blockchain-CEO-Jason-Les--300x300.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/Riot-Blockchain-CEO-Jason-Les--300x300.png?w=150 150w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/Riot-Blockchain-CEO-Jason-Les--300x300.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/Riot-Blockchain-CEO-Jason-Les--300x300.png?w=256 256w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/Riot-Blockchain-CEO-Jason-Les--300x300.png?w=260 260w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/Riot-Blockchain-CEO-Jason-Les--300x300.png?w=218 218w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/Riot-Blockchain-CEO-Jason-Les--300x300.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/Riot-Blockchain-CEO-Jason-Les--300x300.png?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/10/Riot-Blockchain-CEO-Jason-Les--300x300.png?w=1012 1012w" sizes="(max-width: 300px) 100vw, 300px" /><figcaption>Riot Blockchain CEO Jason Les | Source: @JasonLes_ Twitter</figcaption></figure></div>


The Colorado-based company had 55,728 active miners with a hash rate capacity of 5.6 exahashes per second (EH/s) as of Sept. 30. Riot Blockchain is set to receive 5,000 S19-series miners from Bitmain Technologies this month and seeks to reach 12.5 EH/s during the first quarter of 2023.



“It is a sprint,” Les said. “It is an all-hands-on-deck effort to build this infrastructure and get these miners deployed…to get this hash rate up as fast as possible.”



<h3>Mining M&amp;A to come?&nbsp;</h3>



Riot Blockchain is one of the largest publicly traded miners in a space that grew quickly but now must handle a downturn that for many has cut off access to capital.&nbsp;



It had $270 million in cash on its balance sheet at the end of the second quarter. Though Les declined to comment on the company’s current cash on hand — the company will reveal its third quarter results next month — Riot Blockchain held 6,775 bitcoins at the end of September.&nbsp;



<blockquote class="wp-block-quote">“If we have the opportunity to acquire hash rate at a very accretive price, then it becomes interesting,” he told Blockworks.</blockquote>



“Strategically, it’s hard to see anything really adding on. It’s just making a big thing bigger, so what is the price we can get that at, and what is that going to add to our financial results,” he added.



Other executives at larger mining companies have expressed hesitation to acquire in the current market environment. Marathon Digital CEO Fred Thiel <a href="https://cms.blockworks.co/marathon-ceo-building-more-attractive-than-buying-right-now/" target="_blank" rel="noreferrer noopener">told Blockworks last week</a> that it’s more prudent, in many cases, for large bitcoin miners to build than it is to buy.



Riot Blockchain is no stranger to acquisitions. It completed its acquisition of Whinstone’s 100-acre bitcoin mining site in Rockdale, Texas in May 2021. It then revealed, in December, its buy of ESS Metron, a designer and producer of electrical equipment that the company said would help it obtain critical infrastructure to install miners more quickly.



Les pointed to the latter deal as “a huge leap” in the company’s effort to vertically integrate.



“There’s always the potential for those types of acquisitions as well — a company that supports the vertical integration strategy that maybe is not specifically in bitcoin mining themselves,” he added.&nbsp;&nbsp;



As for the space more broadly, Les said he expects mergers and acquisitions among smaller miners that grew too quickly during the bull market last year. Other mining companies, he added, will go bankrupt or seek to go private in an effort to reduce the complexity of their business.



“Consolidation for the sake of consolidation doesn’t make sense,” the Riot Blockchain CEO said. “There has to be a synergistic benefit that’s coming to the table for the two companies, so how those pieces on the chess board come together I’m not sure.”



<h3>A focus on building in Texas</h3>



Though Thiel said Marathon Digital was exploring potential options to expand globally as mining in Texas was getting crowded, Les said Riot Blockchain would continue focusing on expansion in the state.



The company’s relationships in Texas helped it secure a site that intends to host 1 gigawatt of capacity in Navarro County about an hour outside of Dallas, Les said — a deal revealed in April.&nbsp;



“Not deep West Texas…but in an area that has a community that we could partner with and that’s only two hours away from our existing facility in Rockdale,” Les said. “There’s a lot of advantages we have from keeping things relatively local, being able to move people and resources between sites and being able to leverage relationships.”



The deregulated power market is also very attractive in Texas, the executive added. <a href="https://www.ercot.com/" target="_blank" rel="noreferrer noopener">The Electric Reliability Council of Texas</a> (ERCOT) operates more than 1,000 power generation units that represent roughly 90% of the state’s power load.



Les said the closer relationships between bitcoin miners and energy grids will be critical for the space, as mining can monetize energy that would otherwise be wasted.



Riot participated in ERCOT’s Four Coincident Peak (4CP) program from June through September — which allows businesses to reduce energy consumption in exchange for electric bill savings.



“Bitcoin mining has a real opportunity to become a part of our energy grid all over the place,” Les said. “That’s going to make the energy grid better, and that’s going to demonstrate the strength and resiliency, and the value-add, of bitcoin mining.”





<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

Riot Blockchain CEO: Firm Is One of Mining Space’s ‘Best-positioned Acquirers’

<div id="highlights-block_630f8072d1a9d" class="highlights">
 <ul>
 <li>VanEck found Bitcoin mining companies reward their executives far more than the US’ largest companies</li>
 <li>Riot Blockchain’s shareholders voted against an advisory vote on executive compensation in July</li>
 </ul>
 
</div>



A recent shareholder vote to reject a major Riot Blockchain advisory vote on executive compensation hints at a potentially high-risk trend across the bitcoin mining industry.



Riot’s shareholders, in a rustic example of TradFi (traditional finance) governance, are allowed to vote on various decisions related to how the bitcoin mining company is run.



An <a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/1167419/000107997322000922/riot_8k.htm" target="_blank" rel="noreferrer noopener">8-K filing</a> shows Riot’s annual general meeting held on July 27 saw stockholders approve a number of proposals: electing a new director in Hubert Marleau; ratification of independent auditor Marcum LLP; and approval of an <a href="https://www.sec.gov/Archives/edgar/data/1167419/000107997322000922/ex10x1.htm" target="_blank" rel="noreferrer noopener">amendment</a> to the 2019 equity incentive plan. 



But shareholders didn’t agree with the board&#8217;s unanimous recommendation urging them to vote in favor of a “say-on-pay” proposal, noted <a href="https://www.vaneck.com/us/en/blogs/digital-assets/matthew-sigel-bitcoin-miners-excessive-comp-prompts-shareholder-concern/" target="_blank" rel="noreferrer noopener">VanEck</a> analysts, which would&#8217;ve paid out more than $90 million to five Riot executives.



CEO Jason Les and executive chairman Benjamin Yi were slated to receive about $21 million each. Even the lowest paid executive, general counsel William Jackman, was in line for a $13 million remuneration. Meanwhile, the annual bonuses were left blank, suggesting payments down the line.



The motion was designed to retain talent and ensure the achievement of long-term strategic goals.&nbsp;



VanEck’s head of digital assets research Matthew Sigel and product analyst Naomi Zimmermann then decided to zoom out from Riot and check compensation at other major mining firms.



The analysts found bitcoin miners collectively paid “enormous” awards to named executive officers (NEOs), relative to the energy and IT industries and companies listed in the <a href="https://www.investopedia.com/terms/r/russell_3000.asp" target="_blank" rel="noreferrer noopener">Russell 3000</a>. The analysts also described Riot’s and its competitors&#8217; compensation habits as “risky.”



The IT industry counted median total direct compensation of $2.2 million in 2022, according to VanEck. Riot other crypto mining companies paid out median compensation of $10.8 million — 390% more than the IT sector.



<figure class="wp-block-image"><img decoding="async" src="https://lh4.googleusercontent.com/VABNGJYO9xFxQrEUE_OSSSCCGBMFif-FkA6oV3awjRHdlclVukHD_sz5G1YRNHvXP9TU1drGeUm4Zc2sma5CQEZkoUC-ZYT7BLpccEL4BHilVOoDdqo07S-x_eWi9t57y0k_IZW2I5SvP8Ie_Q24I0QdMhrA5wD8_eqHcZYNGApSW5Ixm6T7laD0" alt=""/><figcaption>Image source: VanEck</figcaption></figure>



“These more excessive executive compensation practices (amongst RIOT and its peers) might lead to pressure on peer companies in the digital assets industry to provide similarly large awards, in the absence of shareholder pushback,” VanEck’s analysts wrote.



“Seeing eight-to-nine figure sums for the leaders of firms that have yet to make a profit may be discomforting in any industry.” Blockworks has reached out to Riot for comment.



VanEck expects increased awareness of the <a href="https://cms.blockworks.co/the-investors-guide-to-bitcoin-the-environment/" target="_blank" rel="noreferrer noopener">environmental impact of bitcoin mining</a> to draw attention to executive compensatory standards for the industry and other governance matters.



Riot, which has a market capitalization of over $1 billion, <a href="https://finance.yahoo.com/quote/RIOT/holders/" target="_blank" rel="noreferrer noopener">counts</a> Vanguard, Blackrock, Morgan Stanley and Mirae Asset Global Investments among its top institutional holders. 



The miner’s shares have plunged nearly 70% so far this year, and are down about 4% in the last month to $7.04 per share, data from <a href="https://www.tradingview.com/chart/?symbol=NASDAQ%3ARIOT" target="_blank" rel="noreferrer noopener">TradingView</a> shows.



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

Bitcoin Mining Execs Make Serious Bank Versus Other Industries

<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">“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>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>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">“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.



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

Crypto Mining Firms Take Different Approaches to Selling Bitcoin

<div id="highlights-block_6227b74b85b0c" class="highlights">
 <ul>
 <li>Marathon Digital expects to have 199,000 bitcoin miners producing approximately 23.3 EH/s by early 2023</li>
 <li>Stronghold Digital Mining, which owns its power, seeks to buy additional plants and scale its mining equipment and operations this year</li>
 </ul>
 
</div>



Cryptocurrency miners will diversify their revenue streams and business models from one another this year, according to Compass Point Research and Trading.&nbsp;



The cryptocurrency research firm estimates the global hashrate will rise to 327 exahashes per second (EH/s) by the end of 2022 — a nearly 60% year-over-year increase, <a href="https://compasspoint.bluematrix.com/links2/secure/pdf-viewer/36c024b3-5d83-4e8c-af91-e7c207a26a67" target="_blank" rel="noreferrer noopener">according to a note</a> by Chase White. Hashrate could reach 587 EH/s by the end of next year, he added.



“While we believe our hash rate growth estimate is relatively aggressive compared to consensus, we see it as a more conservative approach given that miner revenues and per-BTC costs are directly related to global hash rate share, potentially suggesting upside to our estimates if growth is lower than expected,” White wrote.



Bitcoin traded around $38,800 at 2 pm ET on Tuesday.



Compass Point expects bitcoin prices to average roughly $49,000 this year — ending the year at $65,000 — and rise to an average of $81,000 in 2023. The expected rise is driven in part by BTC’s resilience during Russia’s invasion of Ukraine and expected increased adoption globally, especially among retail investors, White wrote.



“We do not believe all miners are created equal, and we believe 2022 is the year that investors will start to look at the differentiators between the companies and their businesses,” he wrote. &#8220;These factors lead us to favor Marathon (MARA) among the scaled miners and Stronghold Digital Mining (SDIG) among the small miners.&#8221;



<h3>Marathon versus Riot Blockchain</h3>



Marathon has 35,510 active miners producing approximately 3.8 EH/s, the company reported last week. It increased hash rate 8% from the prior month after deploying 2,800 miners.



Marathon mined 360.3 bitcoins in February — a 730% increase from 43.4 bitcoins in February 2021. The company now holds 8,956 bitcoins, currently valued at nearly $350 million.



While many miners are going the vertically integrated route by owning infrastructure and power sources, Marathon has taken the opposite tactic, according to Charlie Schumacher, vice president of corporate communications.



The company owns its machines but partners with other companies that provide infrastructure, as well as power companies that offer primarily renewable energy, he said. Buying infrastructure was not an attractive return on Marathon’s investment, Schumacher said.



“We could have spent $750 million to build a data center, but instead we spent $750 million to go out and buy machines and increase our hashrate,” Schumacher said. “We would rather buy assets that generate revenue than own assets that don’t.”



Hut 8 Mining, a company not included in Compass Point’s report, recently acquired five data centers as it looks to <a href="https://cms.blockworks.co/bitcoin-miner-targets-gaming-web3-with-cloud-services-expansion/" target="_blank" rel="noreferrer noopener">build out its cloud computing business</a>.



Marathon’s focus this year is to deploy the miners it has purchased. Marathon expects to have 199,000 bitcoin miners producing approximately 23.3 EH/s by early 2023, Schumacher said, and expects its mining operations to be 100% carbon neutral by the end of 2022.



The company’s status as a scaled miner with ample access to capital likely gives it the first look at any available hosting capacity, White wrote. He lowered Riot Blockchain’s rating from buy to neutral, noting that Marathon offers better upside.



Riot produced 436 bitcoins in February, bringing the total it holds to 5,783 BTC, the company reported last week. Riot, which has a fleet of 38,310 miners with a hashrate of 3.9 EH/s, anticipates a total self-mining hash rate capacity of 12.8 EH/s by January 2023.



As for other miners featured in the report, Compass Point retained its buy rating for Argo Blockchain and downgraded its rating for Iris Energy from buy to neutral.



<h3>Stronghold’s 2022 focuses</h3>



Compass Point’s preference of Stronghold compared to fellow smaller miners is driven by its relatively low power costs, diversified revenue streams and low-cost options on additional power capacity.



“We acknowledge there is execution risk on the path to capacity,” White wrote.



The company, which <a href="https://cms.blockworks.co/stronghold-digital-mining-ipo-opens-55-8-above-expected-stock-price/" target="_blank" rel="noreferrer noopener">went public last year</a>, generates power from the waste byproduct of legacy coal mining operations. It’s focused on maximizing the benefits of owning its power, which is typically the largest cost for miners.



“In owning our own power assets, we can continue to grow our mining operations and clean up the environment at the same time,” Stronghold CEO Greg Beard told Blockworks in an email. “It also allows us to stabilize the electricity grid in the region at a time of questionable energy security, not just locally and regionally, but globally.”



The company acquired its second plant, the Panther Creek Energy Facility in Pennsylvania, last November. It reported having about 14,000 miners with 1.3 EH/s of capacity in January.&nbsp;



“We are plugging in miners and expanding our mining power as fast as we can,” Beard said. “That will truly unlock the growth potential of our vertically integrated operation, as we will have the lowest cost of power in the industry.”



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

Bitcoin Mining Operators Jostling for Market Share in 2022

<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>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>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>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>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.



<hr class="wp-block-separator"/>
Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
<hr class="wp-block-separator"/>

Crypto Miners Continue Raking in Bitcoin and Holding

<div id="highlights-block_615e028793ef8" class="highlights">
 <ul>
 <li>Bitcoin miners are increasingly adopting a mine-and-hold strategy as demand for mining hardware increases</li>
 <li>Riot seeking to raise its current hash rate capacity of 2.6 exahash per second (EH/s) to 7.7 EH/s by fourth quarter of 2022</li>
 </ul>
 
</div>



Riot Blockchain’s bitcoin production numbers in September quadrupled year over year as the mining company has so far produced nearly 2,500 BTC in 2021.&nbsp;



The Colorado-based miner produced 406 bitcoins last month and now holds 3,534 BTC, all of which were produced by its mining operations, Riot Blockchain reported on Tuesday.



“Not only do we have a team of bitcoiners heading up our industry-leading bitcoin mining operations, but we fully support the bitcoin network,” CEO Jason Les told Blockworks in an email. “Therefore, we believe holding onto our 3,534 bitcoin … is aligned with our strategy as a bitcoin company.”



Bitcoin’s price was up 8% in the last 24 hours to about $54,740 as of 3 p.m. ET on Wednesday, according to <a href="https://www.coingecko.com/en">CoinGecko data</a>, giving Riot’s held bitcoin a value of about 193 million.&nbsp;&nbsp;



&#8220;We have historically seen that when bitcoin price appreciates and mining economics improve, demand for mining hardware increases,” Viridi Funds CEO Wes Fulford said to Blockworks in an email. “As a result, bitcoin miners are increasingly adopting a “mine and hold” strategy as the bitcoin on their balance sheets serves as a natural hedge against inflated [capital expenditure] spending driven by these opportunistic, demand-driven hardware price increases.” 



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">In September, <a href="https://twitter.com/RiotBlockchain?ref_src=twsrc%5Etfw">@RiotBlockchain</a> mined 406 BTC, sold none of its production, and ended the month with 3,534 BTC on its balance sheet. Publicly traded <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> miners aren&#39;t selling bitcoin, they are accumulating bitcoin. The game has changed. <a href="https://twitter.com/search?q=%24RIOT&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$RIOT</a><a href="https://t.co/Kk4hepCA6U">https://t.co/Kk4hepCA6U</a>&mdash; Michael Saylor⚡️ (@saylor) <a href="https://twitter.com/saylor/status/1445503853315563531?ref_src=twsrc%5Etfw">October 5, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Bitcoin miners earned $1.3 billion in revenue from block rewards and transaction fees during September, a 7% decline from the prior month, according to a Compass Mining report published Wednesday.&nbsp;



Riot competitors Marathon Digital and Hut 8 Mining <a href="https://cms.blockworks.co/marathon-digital-hut-8-mining-building-up-bitcoin-reserves/">recently reported</a> mining 340.6 and 264 bitcoins, respectively last month, bringing the companies’ combined total of bitcoin held to nearly 12,000.



“Given the fixed maximum supply of Bitcoin, continued miner accumulation will result in less daily exchange supply and act as a bullish tailwind for the price of Bitcoin,” Fulford added.



Las Vegas-based Marathon also obtained a $100 million revolving line of credit, secured by bitcoin and USD, with Silvergate Bank, allowing it to purchase more miners and cover other expenses without being forced to sell its bitcoin or stock.



“One large miner holding their bitcoin rather than selling will likely not have a direct effect on the market,” said Compass Mining CEO Whit Gibbs. “However this strategy of accumulating bitcoin on the company&#8217;s balance sheet will lead to a healthy increase in the company&#8217;s valuation.” 



 Riot Blockchain eyes growth



Riot Blockchain currently has a deployed fleet of 25,646 miners with a hash rate capacity of 2.6 exahash per second (EH/s). In late September, 2,000 S19J Pro Antminers were shipped to Riot’s Whinstone facility.



Riot <a href="https://www.riotblockchain.com/news-media/press-releases/detail/109/riot-blockchain-completes-acquisition-of-whinstone-us">completed its acquisition</a> of Whinstone US from Northern Data in May for 11.8 million shares of Riot common stock and $80 million in cash. Based in Rockdale, Texas, Whinstone’s 100-acre site had a total power capacity of 750 megawatts, at the time Riot announced the acquisition, with 300 megawatts developed.



“We believe the acquisition of Whinstone remains a transformational decision for the company and provides additional capacity for miner deployment as well as optionality for alternative miner/datacenter hosting,” states a Compass Pointe Research &amp; Trading note published in August. “Bitcoin miners are highly correlated with their underlying asset although we believe Riot should continue to outperform given its significant scale.”



Another 4,000 S19J Pro Antminers are scheduled to be shipped from Bitmain’s Malaysia factory this month, the firm reported. By the fourth quarter of 2022, Riot intends to have roughly 81,000 Bitmain Antminers up and running.



“Our hash rate and presence in the space continues to grow at unprecedented rates, particularly with the continued development of Riot’s Whinstone facility,” Les said. “As our successful scaling continues into 2022, we anticipate a hash rate of 7.7 EH/s along with a continued dedication to holding the undeniable value that is Bitcoin.” 



<hr class="wp-block-separator"/>



Are you a UK or EU reader that can’t get enough investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a> in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>. 



<hr class="wp-block-separator"/>

Riot Blockchain Seeks to Triple Hash Rate Capacity by Q4 2022

Sam Reynolds

<div id="highlights-block_60d25208df1aa" class="highlights">
 <ul>
 <li>Two of the major US miners are mining bitcoin at a considerable discount, according to research from Compass Point </li>
 <li>One stakeholder in the North American mining industry told Blockworks that he’s yet to see inbound movement to the US from fleeing Chinese miners</li>
 </ul>
 
</div>



The <a href="https://cms.blockworks.co/bitcoin-breaks-below-30000-on-china-concerns/" target="_blank" rel="noreferrer noopener">bitcoin price crash of 2021</a> won’t have the same impact on the mining industry as the crash of 2018 as two of the largest miners in North America are well-positioned to weather the storm.&nbsp;



According to a recent note by Compass Point’s Michael Del Grosso, the firm believes that Riot Blockchain (RIOT) is mining bitcoin at a cost equivalent to approximately $15,000 per bitcoin or a 62% discount to market pricing.



One of its competitors, Marathon Digital (MARA), is mining at a cost of approximately $12,000 per bitcoin, or a 70% discount.&nbsp;



“We believe North American miners are well-positioned to benefit both from the lower global hashrate and the potential for increased availability of mining equipment,” analyst Del Grosso wrote in the note. “In the case of Riot, the firm’s recent acquisition of Whinstone should provide the miner with significant hosting capacity ready to bring on Chinese miners looking to move their operations to North America.”



<h3>A buy rating for North American mining firms</h3>



The firm’s modelling that a prolonged decline in global hashrate — from operations in China packing up and moving abroad — as well as continued price compression is not an issue for either company given their scale. The longer that China’s collective hashrate declines means it&#8217;s easier for miners that are established and operating at full capacity to mine, and neither Riot nor Marathon are overly impacted by price sensitivity.&nbsp;



Compass Point gives both Riot and Marathon a buy rating. The firm also notes “should a <a href="https://cms.blockworks.co/sec-delays-approval-of-vaneck-bitcoin-etf-again/" target="_blank" rel="noreferrer noopener">Bitcoin ETF be approved</a>, Bitcoin miner stocks may experience a decoupling from the movement in Bitcoin price and potentially see more fundamentally-driven performance.”



This is in contrast to the price crash of 2018, where bitcoin mining companies spent a considerable amount of capital upgrading their capacity to capitalize on the bull market of 2017, which ended with the price of bitcoin falling by about 65% from January 6, 2018, to February 6, 2018.



At the time, <a href="https://news.bitcoin.com/miner-goes-bankrupt-manufacturers-stuck-with-inventory-old-rigs-sold-for-scraps/" target="_blank" rel="noreferrer noopener">mining rigs were being sold for scrap metal</a> by the kilo, some of the first US-based <a href="https://www.coindesk.com/bitcoin-mining-firm-giga-watt-declares-bankruptcy-owing-millions" target="_blank" rel="noreferrer noopener">bitcoin miners declared bankruptcy</a>, and Taiwan-based graphics cards manufacturers like Asus and Gigabyte were forced to take expensive write-downs as the market for GPU mining cratered.&nbsp;



<h3>Where are the Chinese miners?</h3>



Although there are a number of reports of miners from China fleeing to the US to re-establish their hashing presence, there’s no indication that they’ve set up shop stateside — only shipped the gear there.&nbsp;



Steve Braverman, president and CEO of Massena, New York-based Dignity Mining Group, told Blockworks that if these firms are going to establish operations in the US, it’s been “very quiet.”



&#8220;There has been very little movement regarding Chinese mining firms. Our colocation facilities are already maxed out,” he said. “There has been very little supply [of ASICs computer chips used by miners], and as you may be aware, most of the rigs come from China. The cost of the rigs has not gone down significantly either. If China miners are moving in, it is not to the US. There are many other friendly countries with low green power costs and are crypto-friendly.”



According to Blockchain.com’s <a href="https://www.blockchain.com/charts/hash-rate" target="_blank" rel="noreferrer noopener">hashrate monitoring</a> tool, the global hash rate has stopped its decline from the prolonged drop that began in early June, but it hasn&#8217;t yet increased. So wherever these miners are going, they’ve yet to turn on their machines.