Public Bitcoin mining companies are resorting to debt financing to increase liquidity following the cryptocurrency's halving, which has significantly reduced their revenues.
Total Fundraising
According to data from BlocksBridge Consulting, nine out of the thirteen U.S.-listed companies raised a combined $1.25 billion through stock offers during the second quarter of 2024. This list includes Bitdeer, Bitfarms, Cipher, CleanSpark, Core, HIVE, Marathon, Riot, and Terawulf. Iris Energy reportedly raised $458 million over the previous quarter, bringing the total amount raised by miners to over $1.7 billion. An additional $530 million raised so far in the third quarter brings the sum to over $2.2 billion.
Convertible Note Offerings
Core Scientific announced on August 14 a $400 million private placement of convertible senior notes to qualified investors. The net proceeds will be used to pay off its outstanding loans and redeem all of its outstanding senior secured notes due in 2028. Marathon Digital also announced a $250 million private offering of convertible notes to acquire more Bitcoin and for general corporate purposes.
Reward Reduction and New Strategies
The most recent Bitcoin halving, which took place in April, cut miner rewards for adding a new block to the blockchain from 6.25 BTC to 3.125 BTC. With reduced rewards, miners are facing tighter margins amid a dropping Bitcoin price. To remain competitive, they are seeking to diversify their revenue streams. For example, Core Scientific has entered into a 12-year agreement with artificial intelligence cloud provider CoreWeave to host Nvidia GPUs, expected to generate $6.7 billion in total revenue for Core.
Miners continue to explore various ways to ensure their liquidity and offset the decline in revenues following the Bitcoin halving. Ongoing fundraising through debt financing and new corporate strategies will help them stay competitive in an environment of shrinking rewards.
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