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Core Scientific Sells 7,202 BTC
On July 5, 2022, Core Scientific, the world’s third largest publicly traded bitcoin miner by market cap ($525.52 million), announced the sale of 78.6% of its bitcoin holdings in its June monthly update.
“During the month of June, the company sold 7,202 bitcoins at an average price of approximately $23,000 per bitcoin, for a total income of approximately $167 million. As of June 30, 2022, the company has 1,959 bitcoins on its balance sheet and approximately 132 million Dollars were cash.
“Proceeds from the sale of bitcoin in June were primarily used to pay for ASIC servers, capital investment in additional data center capacity, and scheduled repayment of debt. Company operating expenses, fund raising, paying off retiree debt. Will continue to sell self-mined bitcoins to maintain liquidity.”
Last week, in our latest mining issue, we covered some of the dynamics of the bitcoin mining cycle, and hash price bull and bear markets.
Given that the hash rate is just 5.43% below its all-time high reading, some more pressure on mining operations seems to be on the horizon. The last bear market miner capitulation period saw the hash rate drop by more than 25% from previous highs, with China’s miner ban of 52.22% being the biggest drop in bitcoin’s history.
While the relative growth of the hash rate has been very low in recent years, the absolute growth of the industry has been very high, especially in the publicly traded sector.
The mining industry’s recent growth over the past two years and synergy with public markets has given it considerable access to debt financing that was unavailable in previous cycles. This allowed miners to boost equity market valuations by borrowing to finance operations and additional capital expenditures against their holdings.
This dynamic has led miners to take their operations underwater in months of bitcoin mining revenue while funding power agreements and outstanding debt. This is a widespread over-generationalization of the industry though, which is why said miners’ equity has fared so poorly relative to bitcoin.
What is Recovery in Public Miners?
When investing in bitcoin miner companies or infrastructure, you are investing for the next hash price bull market – the “gold rush” phase of the bitcoin market cycle. Shown below is the hash price (in logarithmic scale) with the bottom pane showing an increase from previous all-time lows.
As a reminder, the hash value is defined as the daily miner’s revenue divided by the hash rate.
Given the viciously competitive nature of mining, and the hash rate recently dropping back to 218 EH/s, more headwinds are on the horizon for the region – which could put even more pressure on the BTC/USD exchange rate, Margins may further intensify pressure. in the mining sector.
In yesterday’s issue of Bitcoin Magazine Pro, we will cover the latest moves in the macroeconomic landscape with respect to interest rates, commodities and forex markets. to subscribe To access the full Bitcoin Magazine Pro newsletter.