Crypto Miners and Corporations Increase Bitcoin Holdings Amid Profitability Challenges

According to CoinDesk, MicroStrategy, the software company founded by Michael Saylor, is not the only major corporate entity accumulating bitcoin. A recent report by JPMorgan highlights that crypto miners are also adopting this strategy in response to increasing profitability pressures. These pressures are largely attributed to the upcoming reward halving in April and a rising network hashrate, which indicates heightened competition and mining difficulty within the industry. JPMorgan analysts, led by Nikolaos Panigirtzoglou, suggest that these challenges have prompted miners to either hoard bitcoin or seek further investments in the cryptocurrency. Some are even diversifying into artificial intelligence and high-performance computing businesses. Notably, MARA Holdings has adopted a bitcoin-buying strategy similar to MicroStrategy's, known as BTC yield, to navigate these challenges. MARA now holds 35,000 tokens, valued at approximately $3.5 billion, making it the second-largest publicly listed corporation in terms of bitcoin holdings. The trend is not limited to miners. Semler Scientific, a medical-device manufacturer, has also been actively purchasing bitcoin, amassing $144 million worth of the cryptocurrency. The introduction of spot bitcoin exchange-traded funds (ETFs) in the U.S. earlier this year has provided institutional investors with a more direct avenue for bitcoin exposure. This development has led to the underperformance of miner shares, which were previously considered a proxy for bitcoin. JPMorgan's report also notes that miners are increasingly turning to debt and equity offerings to finance their operations, rather than selling their crypto reserves. This year, miners have raised over $10 billion in equity, surpassing the previous record of $9.5 billion set in 2021. This shift in strategy underscores the evolving landscape of bitcoin investment and the growing interest from both corporate and institutional players in the cryptocurrency market.