1. Decline in Bitcoin miner stocks
2. Cathedra Bitcoin moves away from mining
3. MicroStrategy launches another debt offering

September has been a challenging month for Bitcoin miners, with stocks dropping due to decreasing profitability and increasing competition as the network's hashrate rises.

Decline in Bitcoin miner stocks

Bitcoin mining stocks experienced a decline during the first half of September, as the price of BTC remained below the $60,000 mark and the network's hashrate increased, according to a report by JPMorgan. The hashrate, which measures the total computational power that is used to mine and process transactions on the Bitcoin network, has risen by 4% so far this month, reaching levels seen before the last halving event. This rise in hashrate suggests increased competition in the mining industry. The hashprice, which reflects the daily profitability of miners, dropped by 2% in September and is now more than 50% lower than it was before the halving. JPMorgan analysts warned that the combination of declining profitability and seasonal factors could lead to a slowdown in hashrate growth in the near term. The report also revealed that U.S.-listed miners have increased their share of the network hashrate for the fifth consecutive month, reaching a record high of 26.7%. Despite this growth in market share, the total market capitalization of the fourteen U.S.-listed Bitcoin mining companies tracked by the bank dropped by 3% since the end of August, falling to just below $20 billion. Among the individual miners, Hut 8 saw an 11% gain, while CleanSpark underperformed with a 12% decline.

Cathedra Bitcoin moves away from mining

The struggles pointed out by JPMorgan are already causing some companies to move away from Bitcoin mining. Canadian Bitcoin miner Cathedra Bitcoin is shifting its focus from mining operations to buying Bitcoin on the open market, following the strategy of firms like MicroStrategy. In a Sept. 16 memo, Cathedra shared details about its new plan to allocate all capital decisions toward increasing its Bitcoin reserves on a per share basis, a key metric for its largest shareholders. The company acknowledged that Bitcoin mining did not deliver sufficient shareholder value and shared that nine of the ten largest Bitcoin miners by market cap now hold less Bitcoin per share than they did three years ago. Meanwhile, companies like MicroStrategy have adopted policies that are aimed at increasing Bitcoin per share and have been rewarded by equity markets. While Cathedra will continue some of its mining operations, it plans to develop data operating centers that generate predictable cash flows, which will be used to buy more Bitcoin. The company also plans to issue equity, debt, or hybrid securities and borrow against its balance sheet assets to increase its Bitcoin holdings. Cathedra is very confident that its recent merger with computing infrastructure firm Kungsleden will help it boost Bitcoin on a per share basis.

MicroStrategy launches another debt offering

Meanwhile, MicroStrategy announced its third debt offering of 2024, aiming to raise $700 million through the issuance of convertible senior notes due in 2028. The company plans to use the proceeds to pay off $500 million in existing senior secured notes and purchase additional Bitcoin. This decision from MicroStrategy follows two previous debt offerings earlier in the year: one in March raising $700 million and another in June for $500 million. Both were aimed at supporting the company's Bitcoin acquisition strategy. MicroStrategy is one of the largest public holders of Bitcoin, and holds 244,800 BTC. This is worth about close to $14 billion.

The future of Bitcoin remains uncertain as analysts are divided on how upcoming rate cuts and political developments will impact its price. Despite this, companies like MicroStrategy and Cathedra Bitcoin continue to adjust their strategies to maximize their advantage in the current situation.