Crypto analysts, traders, and anonymous Bitcoin influencers often use Bitcoin miners’ actions as a gauge for predicting the direction of Bitcoin’s price. The theory suggests that when miners send their block rewards to exchanges, it indicates an upcoming increase in sell pressure on the asset’s price and possibly reflects distress among miners.
However, at the recent Bitmain World Digital Mining Summit (WDMS) in Hong Kong, publicly listed Bitcoin miners challenged this methodology during a panel discussion hosted by Ray Salmond, Cointelegraph’s head of markets.
Jeff Taylor, the executive vice president of data center operations at Core Scientific, shared their experience with the “hodl strategy.” Core Scientific accumulated a significant amount of Bitcoin and held onto it as the price rose. However, this led to financial struggles, and they had to sell their Bitcoin production daily to overcome those challenges.
Panelists Taylor Monnig of CleanSpark and Will Roberts of Iris Energy also supported Taylor’s perspective. They mentioned that their companies also sell the majority of their mined BTC. CleanSpark followed a conservative approach during the bull market and sold Bitcoin at the peak. This strategy paid off as they expanded their operations, and they are now increasing their holdings amidst the lower Bitcoin price.
Roberts emphasized that Bitcoin mining and operating data centers are different business models from investing in Bitcoin as an asset. Their focus is on generating shareholder value through operating data centers and generating cash flows. They believe they can generate more value by selling Bitcoin today and potentially receiving even more in the future. They also consider the possibility of paying out dividends to investors.
Nazar Khan, co-founder of TeraWulf, shared a similar perspective. He described TeraWulf as a converter, converting power into Bitcoin through their mining operations. They sell every Bitcoin they produce on a daily basis to evaluate their efficiency in the conversion process.
These statements from publicly listed miners at the WDMS challenge the notion that miners’ Bitcoin selling strategies indicate distress or capitulation. Instead, they suggest that these strategies align with their growth plans and capital needs.
Foundry’s vice president Kevin Zhong added that Bitcoin miners should be strategic and creative in navigating market conditions. In scenarios where the price doesn’t rise as expected, miners need to explore alternatives like driving up transaction fees and finding ways to subsidize themselves. They also need to develop treasury plans, including hedging strategies and considering whether to liquidate or hold onto Bitcoin based on their outlook for the asset.
The discussion during the panel shed light on the diverse approaches miners are taking in response to market conditions. It revealed that publicly listed miners are focused on generating value for their stakeholders and adapting their strategies to ensure long-term profitability.
To gain a deeper understanding of the conversation about Bitcoin miners’ pivot to renewable energy, their views on the upcoming halving, and the growing synergy between energy producers and BTC miners, you can watch the full WDMS panel discussion.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment decisions.