Public mining companies have increasingly turned to debt financing to enhance their cash flow following the recent Bitcoin halving. Based on earnings reports compiled by BlocksBridge Consulting, nine out of 13 U.S.-listed companies raised a total of $1.25 billion through stock offerings in the second quarter of 2024. These companies include Bitdeer, Bitfarms, Cipher, CleanSpark, Core Scientific, HIVE, Marathon Digital, Riot Blockchain and Terawulf.
Additionally, Iris Energy reportedly secured $458 million in the previous quarter, bringing the total amount raised by miners to over $1.7 billion. An extra $530 million raised so far in the third quarter brings the total to over $2.2 billion.
On August 14, Core Scientific announced a $400 million private offering of convertible notes for qualified investors. The Bitcoin miner stated that the proceeds will be used to repay “outstanding loans under its credit and guaranty agreement entered into on January 23, 2024 and redeem all of its outstanding senior secured notes due 2028.”
Read more: Ripple vs. SEC: Was the Outcome Foreseen and What Was the Main Objective?
A senior convertible note is a type of debt security that can be converted into equity at a future date.
Marathon Digital is another Bitcoin miner offering convertible notes to qualified institutional investors, announcing a $250 million private offering on August 12. The funds are intended to purchase additional Bitcoin and for general corporate purposes, including working capital, debt repayment, and other obligations.
BlocksBridge’s analysis highlighted that CleanSpark has entered into credit agreements with Coinbase for loans secured by Bitcoin, and Canaan pledged 530 BTC in the second quarter to secure loans totaling $19.2 million, with a maturity period of 18 months.
The most recent Bitcoin halving, which took place in April, reduced miner rewards for adding a new block to the blockchain from 6.25 BTC to 3.125 BTC. As a result, miners are experiencing tighter profit margins amid a downward trend in Bitcoin prices. The cryptocurrency’s price fell from approximately $64,300 on April 20 to $56,866 at the time of writing, representing an 11.5% decline since the halving.
To stay competitive, miners are looking to diversify their revenue streams. Core Scientific, for example, has entered into a 12-year agreement with artificial intelligence cloud provider CoreWeave to host its Nvidia graphics processing units (GPUs). This deal is expected to generate $6.7 billion in total revenue for Core Scientific.
Cre: cointelegraph
I’m Jessi Lee, currently living in Singapore. I am currently working as a trader for AZCoin company, with 5 years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
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