MicroStrategy (MSTR), the software program firm based by Michael Saylor, isn’t the one large-scale company purchaser of bitcoin (BTC), JPMorgan (JPM) mentioned in a Wednesday report. Crypto miners are additionally adopting the buildup technique.
The shift to increase bitcoin holdings is pushed by rising strain on profitability, which stems from the reward halving in April and a rising community hashrate, the report mentioned. Hashrate is the full computational energy used to mine and course of transactions on a proof-of-work blockchain and is a proxy for competitors within the trade and mining issue.
“This possible prompted miners to hoard or search additional investments into bitcoin or diversify into AI/HPC companies,” analysts led by Nikolaos Panigirtzoglou wrote, referring to synthetic intelligence and high-performance computing.
Miners akin to MARA Holdings (MARA) have adopted an identical bitcoin-buying technique to MicroStrategy, known as BTC yield, in response to those challenges, JPMorgan mentioned.
MARA now owns 35,000 tokens ($3.5 billion) and is the second-largest publicly listed company by way of bitcoin holdings.
The miners aren’t alone. Medical-device maker Semler Scientific has additionally been actively shopping for the world’s largest cryptocurrency, and now owns $144 million value of crypto.
January’s introduction of spot bitcoin exchange-traded funds (ETFs) within the U.S. has given institutional buyers a extra direct option to achieve bitcoin publicity, the financial institution mentioned. Shares of miners, which had been handled as a proxy for bitcoin, have underperformed because of this.
The financial institution famous that apart from shopping for extra bitcoin, miners are more and more financing their companies through debt and fairness choices fairly than promoting their crypto reserves to cowl operational prices.
Miners have raised greater than $10 billion in fairness to this point this yr, eclipsing the earlier excessive of $9.5 billion in 2021, the report added.
Learn extra: Bitcoin Miners Cipher, CleanSpark and MARA Upgraded at JPMorgan