Following the Bitcoin halving, public Bitcoin miners use debt financing to increase their cash flow as the crisis intensifies.
In the second quarter of 2024, nine of the 13 Bitcoin miners listed in the United States raised capital through stock offers.
In the second quarter of 2024, nine out of the 13 United States-listed companies raised a combined $1.25 billion through stock offers, as per BlocksBridge Consulting data derived from earnings reports. Bitdeer, Bitfarms, Cipher, CleanSpark, Core, HIVE, Marathon, Riot, and Terawulf comprise the list.
Furthermore, Iris Energy is reported to have raised $458 million in the previous quarter, increasing the total amount raised by miners to over $1.7 billion. The total has now exceeded $2.2 billion due to an additional $530 million raised in the third quarter.
Core Scientific announced a $400 million private offering of convertible notes to qualified investors on August 14. The Bitcoin miner has confirmed that the net proceeds will be allocated to repay its “outstanding loans under its credit and guaranty agreement entered into on Jan. 23, 2024, and the redemption of all of its outstanding senior secured notes due 2028.”
A senior convertible note is a form of debt security that has the potential to be converted into equity at a later time.
Marathon Digital is an additional Bitcoin miner that provides convertible notes to qualified institutional investors. The company disclosed a $250 million private offering on August 12 to acquire additional Bitcoin for “general corporate purposes,” encompassing debt repayment, working capital expenses, and other obligations.
“BlocksBridge’s analysis noted that CleanSpark disclosed in its Q2 filing that it has entered into credit facilities with Coinbase for loans collateralized by Bitcoin.” Additionally, Canaan pledged 530 BTC during the second quarter to secure loans totaling $19.2 million with a maturity date of 18 months.
Miner rewards for adding a new block to the blockchain were reduced from 6.25 BTC to 3.125 BTC due to the most recent Bitcoin halving in April.
Bitcoin Miners Experience Cash Crisis
Bitcoin Miners are experiencing diminished rewards, which has resulted in tighter margins, as the Bitcoin price has been on a downward trajectory. The cryptocurrency price has sunk from approximately $64,300 on April 20 to $56,866 at the time of writing, representing an 11.5% decline since the halving.
Miners are endeavoring to diversify their revenue streams to maintain their competitiveness. For example, Core Scientific has signed a 12-year agreement with CoreWaeve, an artificial intelligence cloud provider, to host its Nvidia graphics processing units (GPUs). Core anticipates that the transaction will generate $6.7 billion in revenue.
