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In 2024, the combined market capitalization of public Bitcoin mining companies reached $50 billion for the first time.
2024 was a record-breaking year for the Bitcoin mining industry, but increased competition and sector volatility compelled several companies to adopt new strategies.
According to a Jan. 7 report by NiceHash and Digital Mining Solutions, public miners followed in MicroStrategy’s footsteps by increasing their Bitcoin (BTC) treasury holdings.
“In 2024, a notable shift emerged among Bitcoin miners, with many opting to retain a larger portion of their mined Bitcoin or refraining from selling altogether,” wrote report authors Nico Smid and Cindy Geng.
The purchase came amid reports that the Bitcoin mining company was under pressure from activist investor Starboard Value.
Riot Platforms bought approximately $510 million worth of Bitcoin (BTC) between Dec. 10 and 12, bringing the Bitcoin miner’s total BTC holdings to nearly $1.7 billion, according to a Dec. 13 regulatory filing.
The purchases coincide with reports that activist investor Starboard Value has taken a “significant position” in the Bitcoin miner.
On Dec. 12, The Wall Street Journal reported that Starboard urged Riot to repurpose some of its Bitcoin mining capacity to service artificial intelligence models. Buying BTC has shown itself to be another way for Bitcoin miners to win over investors.
If it follows through with its proposal, Riot Platforms will join many of its colleagues in paying top prices for BTC.
Riot Platforms has proposed raising $500 million to buy more Bitcoin (BTC). The company may conduct a private bond issue for qualified institutional investors. Its decision comes as Bitcoin hovers around its all-time high and other industry heavyweights have made large acquisitions at top price.
Riot may offer senior convertible notes through private offering memorandums. Purchasers would have the option of buying $75 million more in notes within three days of their initial purchase. The offering will be subject to market conditions, it said, and no mention was made of interest payments.
The notes will be unsecured senior obligations with a Jan. 15, 2030, maturity date and will be redeemed or converted into Riot common stock at the company’s election. The conversion rate and other terms will be determined at the time of pricing the offering.
The increasing Bitcoin hashrate and block reward reduction from the Bitcoin halving may lead to miner consolidation among smaller firms.
The Bitcoin hashrate has reached a new all-time high, showcasing the growing security of the world’s first blockchain network.
The Bitcoin network hashrate — the total computing power securing the Bitcoin network — reached an all-time high of 769.8 exahashes per second (EH/s) on Oct. 21.
The hashrate has been in a steady uptrend since 2021, BitInfoCharts data shows. The hashrate’s escalation is widely correlated with developments in mining hardware like application-specific integrated circuits (ASICs).