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Soaring down again this morning, will it
hold 8’s?
This stock hasn't soared since last year.
Would be great if bitcoin turned around
this year, but I'm not betting on it.
lol, that was yesterday; might of had chart upside down!
What the heck are you looking at??
MARA $oaring in AH along with Bitcoin. >
Bitcoin down again today, and so goes MARA.
Back to red for MARA, doesn't take much.
Bitcoin Miners Are Selling Tokens as Prices Linger Near Lows
Flow from miners to exchanges seen as indicative of more sales
New miners that counted on higher prices may face liquidations
By
Jialiang David Pan
June 5, 2022
Bitcoin miners are beginning to sell tokens they’ve hoarded to cover burgeoning costs with the prospects for industry growth slowing and the price of the largest cryptocurrency showing few signs of rebounding following the recent collapse from record highs.
Miners transferred about 195,663 coins to exchanges in May, the biggest monthly increase since January, according to data from Coin Metrics compiled by Compass Mining. Based on Bitcoin’s average price of around $32,000 in May, the total value of the tokens was about $6.3 billion.
That indicates companies may be moving large amounts of coins stored in their digital wallets to exchanges for sale. To be clear, the number does not necessarily mean miners are selling that many tokens since some miners would put their coins in exchanges for other transactions and not sell.
Sellers include publicly traded miners such as Riot Blockchain Inc. that had been stockpiling Bitcoin on a bet that prices would keep appreciating. They had served as a proxy for equity investors that wanted to gain crypto exposure without actually owning the tokens. Smaller miners who face large liquidations are also selling their Bitcoin. The token has dropped about 35% this year.
“I think miners are just talking about the macro environment and think it is probably prudent to sell Bitcoin in these levels in order to keep the operations safe,” said Will Foxley, director of content at mining hardware marketplace and hosting services provider Compass Mining.
More large-scale public miners have become cash-strapped as it became harder to raise capital through debt or stock sales during a recent bear market. They’re also seeking wider profit margins as the companies expand. Riot is building a mining facility with one gigawatt capacity in Texas after it has completed its 750-megawatt site, which is one of the largest mining farms in the US.
Miners are also trying to pay for mining machines they ordered months ago while putting down non-refundable deposits in millions of dollars.
A wave of small miners that came in during the bull cycle and bet big on Bitcoin prices rising are now at risk of needing to liquidate their mined coins, said Matthew Schultz, executive chairman of crypto-mining company CleanSpark.
Cathedra Bitcoin Inc., a small-scale miner, had to sell almost all their holdings to maintain their mining operation.
“We have spent the last several weeks restructuring our balance sheet and operations to ensure Cathedra is well positioned to endure a prolonged economic downturn,” Cathedra Chief Executive Officer AJ Scalia said in a statement.
The flow data tracking transactions between miners and exchanges is one of the best proxies for sales of mined coins, but it has limitations. While the data includes digital wallets from major exchanges such as Binance and Gemini, it doesn’t have data from Coinbase due to the biggest US exchange’s wallet design. Some of the miners also opt to liquidate their crypto holdings through over-the-counter trading desks, whose trading data is typically not public, Foxley said.
Shares of public miners have been hit hard this year. Riot is down 72% since December, while Marathon Digital Holdings Inc. has slumped a similar amount.
https://www.bloomberg.com/news/articles/2022-06-05/bitcoin-miners-are-selling-tokens-as-prices-linger-near-lows
MARA is moving up this morning with surge in bitcoin price.
It’s bounced off the lower 8’s
several times now, but it just follows
what bitcoin is doing pretty much. I
know it’s oversold like the most others
but I don’t trust the markets. I don’t
know if they’ve bottomed out yet
with this pesky inflation. Some are predicting a
mild recession in 2023 ..
Waiting for some acquisitions in the space. The stronger balance sheets will win out and get bargain basement prices on crypto machines.
The prices have come down as finally strapped miners sell some of their machines MUCH LOWER than prices just 6 months ago.
The surviving companies will be much more profitable --because there will be LESS competition in the bitcoin mining as competitors fold, sell some of their machines to survive or get bought out.
MIGI and MARA are my only two holdings. Staying away from BITF for now and HIVE.
8.40 > wayyyyy oversold!
MARA @ 8.55 > good time to load. This may be the bottom!!!!!
MARA could become KING OF THE HILL. While other miners exit, Marathon's mining transactions going to grow exponentially!
Shares of crypto-related companies are trading lower after Coinbase announced a hiring freeze and Gemini announced layoffs amid crypto market conditions. A drop in crypto prices and a New York bill on Bitcoin mining have also pressured the space.
Bear Market Could See Some Crypto Miners Turning to M&A for Survival
Companies that have already survived the previous down market and have enough capital and a sound business strategy will be able to survive this cycle.
Aoyon Ashraf
Jun 1, 2022
Survival of the fittest – the old adage is playing out for crypto miners this year as a sell-off in the broader market is squeezing out some companies in the overcrowded industry.
In digital asset mining, particularly for bitcoin, competition has increased greatly in recent years as several new entrants joined the industry during the peak of 2021. However, with a price decline, survival of many new miners might be hanging on these companies being able to sell themselves or merge with another peer, according to industry participants.
“I think in the next six months or so we'll probably see some M&A activity happen,” said Amanda Fabiano, head of mining at Galaxy Digital, “because some miners who got in the sector during the peak are just not going to be able to meet their requirements.”
During the 2021 bull run of the crypto market, margins of some bitcoin miners had been as high as 90%, which led to many new entrants and miners looking to grow at hyper speed. To do so, companies ordered mining rigs at high prices and deposited money upfront for their orders.
Fast forward to 2022, bitcoin prices have tumbled and margins have shrunk. Bitcoin network’s hashrate is hovering around all-time highs and operating costs are higher due to rise in energy prices – leaving miners in a very tight spot. “A falling bitcoin price means miner margins are compressing,” said Mason Jappa, co-founder and CEO of blockchain infrastructure and cryptocurrency mining company Blockware Solutions. “On top of that, margins have also been declining because Bitcoin’s network mining difficulty is increasing” as more miners are joining the network, he added.
Many of these companies that came into the mining sector in the last 12-18 months lacked a “sound balance sheet,” Mike Levitt, CEO of Core Scientific (CORZ), the largest publicly traded miner in terms of hashrate, told CoinDesk.
“These companies have found themselves in a position where they made plans and commitments that assumed external capital, whether from public or private markets, would always be readily available," he said. "Now, the cost of capital, if available, just got more expensive, and some of these miners do not have sufficient capital to finish what they have started.”
Moreover, supply-chain issues and lack of access to capital are making matters worse for many miners. “The ability to secure large pre-orders of ASIC miners is no longer the major bottleneck to growth,” said Wall Street bank Jefferies analyst Jonathan Petersen in a recent research note. “Construction delays, caused by difficulties securing building materials and finalizing power purchase agreements, are a larger impediment to deploying new fleets."
This perspective was echoed by crypto miner Hive Blockchain. “The crypto mining industry in general appears to find itself at a crossroads with a supply of very expensive ASIC chips and few places to plug them in,” according to a statement from the miner. “In our market intelligence, the company has noticed significant supply disruptions for electrical equipment needed to make data centers, such as transformers and switch gear."
All these factors combined, and some of the newer and less capitalized miners are now in a limbo, as they are finding it hard to pay for their operations under the terms set out during the bull run.
“I think we're going to see miners get humbled this year, in contrast to last year, when we saw the rise of public miners,” Fabiano said. Some of the miners who have signed some longer-term contracts will have to put up a lot of money in order to satisfy those obligations, she added.
On top of that, the ASIC markets are shifting downward, which means that miners are not going to be able to make the profit that they could have on the secondary market by just selling their machines if their operations aren’t up and running, according to Fabiano. In fact, with the slide in bitcoin prices, some of the older mining rigs, such as Bitmain’s Antminer S9s, are becoming less profitable, leading to miners shutting them down to avoid shouldering the costs.
This is likely to drive several miners to look for an exit strategy by selling their business or merging with other companies. “I think the ones [miners] that have no operational experience, no background in bitcoin mining, are probably the ones that will look for M&A, or they’ll have a distressed debt situation where they're taking on [expensive] debt,” she said.
M&A opportunities
This tight market environment has already led to larger, more established miners, such as Core Scientific and Bitfarms (BITF), to lower their hashrate growth expectations for the year to a level that is more serviceable via capital they already have on their balance sheets. Meanwhile, Marathon Digital (MARA) remains “cautiously optimistic” about their hashrate growth outlook.
With larger miners reining in their growth outlook, the newer and smaller miners are likely to be in a tougher spot. This will probably lead to mergers fairly quickly given how long these newer entrants can actually withstand some of this market volatility in a bear market, according to Michael Ashe, head of investment banking at Galaxy Digital. “I think we're going to see all different shapes and forms of M&A opportunities,” in this cycle, he said.
In fact, Core Scientific has said that the company is already getting calls for M&A from miners who are feeling the squeeze. “There are a number of folks that have commitments that were dependent upon their being able to raise additional capital, and they're finding it challenging to raise that capital,” said Core’s Levitt during a conference call, adding, “we're starting already to have to be approached, frankly, with opportunities.”
Core Scientific will look at two types of potential M&A deals: One is cheap mining companies, and other is a business that helps the company grow, Levitt told CoinDesk. “Those are the two areas we're looking for. It's either value or growth, and if you're really lucky, it's a combination of both,” he said.
Moreover, he is also getting calls from other parts of the mining ecosystem, including companies with electrical equipment and power providers who now suddenly have a surplus of both and need buyers. "Companies that did not prepare for this downturn have very difficult strategic decisions to make. In terms of consolidation, we appreciate the current complexities in this industry, and we will continue to look into acquiring the best in class of our industry as we are presented with those deals,” Levitt added.
Miners who are more capitalized and have a solid strategy will likely find such a market an opportunistic one to pick up assets or companies at cheaper valuations. “This cycle is an interesting opportunity from an M&A perspective, because you do have some of these more established miners who have already weathered the past bear markets and will now look at this as an opportunity to go out and acquire equipment and real estate at attractive values,” said Galaxy’s Ashe.
Who will survive?
With publicly traded mining equities down, on average, more than 50% this year, investors’ confidence in the sector might be shaken. However, this could be an opportune time for longer-term investors to bottom-fish for attractive value. “Timing the exact bottom is not easy, but many on-chain and market indicators point to now being a good time to accumulate both bitcoin and bitcoin mining rigs,” said Blockware Solution’s Jappa. So then, what should the investors look for in a miner to sort out the winners?
One answer is look at the past downturns. “The miners that have survived the bear markets in the past are still going to be the ones that survive this next round,” said Galaxy’s Fabiano. “Being extremely opportunistic over the next six months with ASICs [as their prices drop] while also having a really strong strategy for growth on the infrastructure side will be an amazing way for miners to really separate themselves from the masses."
Miners who are prepared and have the latest generation equipment with locked-in power rates will be able to benefit from current market conditions, said Zach Bradford, CEO of bitcoin miner CleanSpark (CLSK). “This stage in the business cycle will reward miners that have consistently delivered value to their shareholders and the Bitcoin ecosystem,” he added.
Another crucial factor to consider is the miners that are already sitting on cash and are still able to access the capital markets to finance their growth. “As the BTC mining industry funds more of its growth with debt, we expect the profitability of miners to continue to diverge with the larger public miners widening their cost of capital advantage,” wrote Wall Street investment bank BTIG’s analyst Gregory Lewis in a recent research note.
Digging deeper, Jefferies' Petersen sees larger miners, such as Marathon Digital and Core Scientific, at a “relative advantage” compared to smaller miners when accessing debt financing. He also expects companies to start selling some of their mined bitcoins that they usually hold on their balance sheets in order to pay for operational expenses.
Recently, miner Argo Blockchain (ARBK) said during its first quarter conference call that it is raising debt and selling a portion of its mined bitcoin to cover some of its expenses. Meanwhile, Core Scientific said that it sold some of its mined bitcoins this year and will continue to do so.
Other miners such as Marathon also said they are considering selling some of their mined bitcoins, while peer Riot Blockchain (RIOT) has already started selling its mined digital assets.
Tying it all together, Arcane Research’s analyst Jaran Mellerud wrote in a recent report that “to gauge which miners are the best prepared to get through the bear market and even potentially capitalize on it by buying assets of distressed competitors, it's essential to look at two factors: each company's bitcoin production cost and the strength of their balance sheets.”
Based on the most recent information, Riot Blockchain has the lowest power prices among the top five miners by market cap, only paying $24 per megawatt per hour (2.4 cents per kilowatt per hour), Mellerud wrote. He also noted that power prices have likely increased for all mining companies in recent months.
Good analysis showing MARA stability: Charlie Schumacher, a spokesperson for Marathon, says the company paid for most of its newer mining rigs “far below the current market rate”—except for last-generation rigs like the 78,000 it ordered in December. He says that Marathon’s “asset-light model,” by which it partners with hosting services rather than building its own infrastructure, protects the company from the issues the industry is experiencing.
The crypto miners with access to low cost power AND able to take advantage of the plummeting crypto mining machine prices. There are many companies out there that know how to put a purchase order in for machines--but cannot get them deployed quickly when they finally get them.
Mawson Infrastructure has been impressive in their bitcoin production and expansion. They do self mining and host mining (to benefit from the companies out there that cannot get it together on their own).
Looking for another crypto miner that also has low cost, sustainable power access.
BTW--just wait for the coming shakeout in this sector. SDIG is apparently selling some of their mining machines because they are burning cash.
I know possible 30% increase in electric rates this year > NY State. MARA may drop into the $7.00 range with Bitcoin crashing.
MARA mentioned alot in the full article. (Apologies for the partial article post previous)
As Bitcoin Falters, Crypto Miners Brace for a Crash
Electricity costs more, Bitcoin is worth less. What can possibly go wrong?
Last year, as bitcoin’s price rose as high as $68,000, miners were having a blast. Their profits, according to some estimates, were hovering just under 90 percent, and many of them decided to expand their operations at a frantic pace, bracing for an even larger 2022 bonanza.
That windfall has not come to pass. Over the past few months, cryptocurrency markets have slid, with bitcoin’s price hovering at $30,630 at the time of writing. At the same time, the price of electricity shot up across the world because of a bounce-back in demand and the war in Ukraine. That is a problem for bitcoin miners, who use energy-chugging mining computers, called ASICs, to coin cryptocurrency by solving complex mathematical problems. Energy can account for up to 90 to 95 percent of a miner’s overhead, according to Bitfury CEO Valery Vavilov in an interview with Reuters in 2016.
In some parts of Europe, energy rates have shot up so dramatically that mining one bitcoin can cost up to $25,000, says Daniel Jogg, CEO of Enerhash, a company running blockchain data centers. “Some operations were running without profits,” he says. Texas, a cryptocurrency mining hot spot, has been grappling with an intense heat wave that caused the price of energy to jump by 70 percent—from 10.6 cents to 18.4 cents per kilowatt hour—over the past twelve months. The US currently makes up 37.84 percent of global crypto-mining activity, according to the University of Cambridge, following a 2021 mining ban in previous crypto powerhouse China. “The problem now is the price of energy on a gross basis, but also the volatility in energy price,” says Alex Brammer, vice president for business development at crypto-mining infrastructure company Luxor Mining. “It's really hard to model forward what energy prices are going to be.”
That problem is compounded by a growing number of miners joining the network since last summer, which in turn has reduced individual miners’ outputs. In short, miners are paying more to mint fewer bitcoins, and their coins are less valuable. While miners are still turning a profit, it is shrinking, says Sam Doctor, chief strategy officer at digital asset investment bank BitOoda, who estimates margins are now in the range of 60 to 73 percent. “Even miners who are using newer mining rigs—which are comfortably profitable—are making less money than before,” he says. Older ASICs from the S9 generation, which still constitute a third of mining rigs in use worldwide, are no longer profitable in most cases, Doctor adds. “Now with the price of energy going up, miners that don't have a fixed-price energy contract can get squeezed on both sides.” Doctor says that most miners, including larger mining companies, don’t have such contracts, because securing one requires “stronger credit” than most of them have at the moment.
Despite the still eye-popping margins, miners are in a tough spot. Most publicly listed mining companies—including industry leaders Riot, Marathon, and Core Scientific—have seen their market capitalization plummet by well over 50 percent. Both Riot and Core Scientific have missed their bullish revenue estimates and have conservatively revised their expansion plans.
The fear is that if these negative trends do not reverse, this might be just the start of an industry-wide malaise. In the two years before the crash, miners were scrambling to buy cartloads of ASICs to churn out more bitcoin.The epitome of this buying bonanza is Marathon—one of the top three miners in the US—which purchased 78,000 ASICs from manufacturer Bitmain in December 2021 for a record $879 million; that came hot on the heels of another purchase of 30,000 Bitmain ASICs for $120 million in August 2021. Marathon’s plan was to run 133,000 rigs by the first half of 2022, but as of May the company had only 36,830 operational ASICs, after facing installation snags, adverse weather events at one of its facilities in Montana, and delays securing an energy contract with Texas’ power grid. The value of idle or still-to-be-delivered ASICs might soon fall below the price that Marathon—and other mining companies—paid for them near the peak of bitcoin’s bull run, as ASIC prices are generally correlated with that of bitcoin. Charlie Schumacher, a spokesperson for Marathon, says the company paid for most of its newer mining rigs “far below the current market rate”—except for last-generation rigs like the 78,000 it ordered in December. He says that Marathon’s “asset-light model,” by which it partners with hosting services rather than building its own infrastructure, protects the company from the issues the industry is experiencing.
“Many miners are struggling to pay for their machines because they first invested heavily in infrastructure, with the hope that they could then raise the money to pay for machines that would fill that infrastructure,” Schumacher says. “We don't have to worry about paying to construct infrastructure before we pay for our miners.”
Observers say that miners’ ASIC-buying spree was mostly funded by debt. Doctor, while declining to name any specific company, says that “certain miners have unfunded expenses. They have ordered a whole bunch of machines, they paid a deposit, but they don't necessarily have the funding already secured, or they may be losing some of that funding to pay the second balance to receive the rigs.” That burden alongside bitcoin price’s slump and costlier energy could impact companies’ bottom lines, says Jurica Bulovic, head of mining at Foundry, a lender to mining outfits. “Anyone who bought equipment at the height of the cycle when bitcoin's price was 65,000 and took a loan to do so—which is a lot of the industry—they are not cash-flow positive today,” Bulovic says.
In the wake of the crypto crash, there are signs that miners need cash, and quickly— and given the current market sentiment they cannot just turn to investors for help. This month, Riot Blockchain, a major US miner, raised $10 million from the sale of 250 bitcoins (out of a trove of 6,320) to fund further expansion; two days later Marathon announced it was considering selling some of its bitcoins, albeit not “in the near term.” That bucked a well-established tendency among miners to hold—in crypto parlance, “HODL” (a typo later reinterpreted as “hold on for dear life”)—to their cryptocurrencies. The sell-off isn’t restricted to bitcoin: Brammer says that Luxor Mining is receiving “frantic calls'” from publicly traded companies trying to sell ASICs below book value. “We're starting to see fire sales,” he says. That might further depress ASIC prices, even if Robert Van Kirk, managing director of mining equipment marketplace Kaboomracks, says that sellers “don't want to lower their pricing any more,” despite tepid demand.
The question is whether that spiral will start to make lenders worried. In the past two years of prosperity, some mining companies have borrowed money against their bitcoin reserves, or even entered so-called “equipment-backed debt” agreements where the loan was collateralized with the mining rigs themselves. Now that the price of both bitcoin and ASICs is going down, that collateral has lost value. “If the miners are over-leveraged, the pain could trickle down to other parts of the industry. For example, lenders, given that the value of collateral has been dropping,” says Bulovic. “Even if not every lender is the same, and not every loan is the same.”
Talk of consolidation in the bitcoin mining industry and a wave of mergers and acquisitions has grown increasingly loud. “Over the next 12 to 18 months, there's going to be evidence coming out on which companies are run really well and are operationally efficient and have healthy levels of debt,” says Brammer. “These companies will be resilient to very tight margins after miners get used to 100 percent margins—which are about to be squeezed down.”
“Inside of our industry, we're seeing a lot of signs of stress right now."
As Bitcoin Falters, Crypto Miners Brace for a Crash
Electricity costs more, Bitcoin is worth less. What can possibly go wrong?
“Many miners are struggling to pay for their machines because they first invested heavily in infrastructure, with the hope that they could then raise the money to pay for machines that would fill that infrastructure,” Schumacher says. “We don't have to worry about paying to construct infrastructure before we pay for our miners.”
Observers say that miners’ ASIC-buying spree was mostly funded by debt. Doctor, while declining to name any specific company, says that “certain miners have unfunded expenses. They have ordered a whole bunch of machines, they paid a deposit, but they don't necessarily have the funding already secured, or they may be losing some of that funding to pay the second balance to receive the rigs.” That burden alongside bitcoin price’s slump and costlier energy could impact companies’ bottom lines, says Jurica Bulovic, head of mining at Foundry, a lender to mining outfits. “Anyone who bought equipment at the height of the cycle when bitcoin's price was 65,000 and took a loan to do so—which is a lot of the industry—they are not cash-flow positive today,” Bulovic says.
In the wake of the crypto crash, there are signs that miners need cash, and quickly— and given the current market sentiment they cannot just turn to investors for help. This month, Riot Blockchain, a major US miner, raised $10 million from the sale of 250 bitcoins (out of a trove of 6,320) to fund further expansion; two days later Marathon announced it was considering selling some of its bitcoins, albeit not “in the near term.” That bucked a well-established tendency among miners to hold—in crypto parlance, “HODL” (a typo later reinterpreted as “hold on for dear life”)—to their cryptocurrencies. The sell-off isn’t restricted to bitcoin: Brammer says that Luxor Mining is receiving “frantic calls'” from publicly traded companies trying to sell ASICs below book value. “We're starting to see fire sales,” he says. That might further depress ASIC prices, even if Robert Van Kirk, managing director of mining equipment marketplace Kaboomracks, says that sellers “don't want to lower their pricing any more,” despite tepid demand.
The question is whether that spiral will start to make lenders worried. In the past two years of prosperity, some mining companies have borrowed money against their bitcoin reserves, or even entered so-called “equipment-backed debt” agreements where the loan was collateralized with the mining rigs themselves. Now that the price of both bitcoin and ASICs is going down, that collateral has lost value. “If the miners are over-leveraged, the pain could trickle down to other parts of the industry. For example, lenders, given that the value of collateral has been dropping,” says Bulovic. “Even if not every lender is the same, and not every loan is the same.”
Talk of consolidation in the bitcoin mining industry and a wave of mergers and acquisitions has grown increasingly loud. “Over the next 12 to 18 months, there's going to be evidence coming out on which companies are run really well and are operationally efficient and have healthy levels of debt,” says Brammer. “These companies will be resilient to very tight margins after miners get used to 100 percent margins—which are about to be squeezed down.”
“Inside of our industry, we're seeing a lot of signs of stress right now.
Could happen and have $ waiting
If this drops lower I’ll be loading up,
crypto will come roaring back eventually,
just have to wait and hold
With Bitcoin and Nasdaq down almost 4%
today, MARA seems to be holding fairly well
in the $10 range here. Perhaps it bottomed out
last week in the 8's, one can hope.
LET'S GO MARA !
Back in with a few shares. Maybe we run today to 11.00+
MARA
Tough market for risk assets--and bitcoin is now considered a risk asset.
Prices are tempting but at the moment I will follow the 3 day green rule. Bitcoin 30k support is becoming resistance.
Volatile, tough to know.
I am not to eager to jump back in its Friday and could still drop for the weekend
I should of bought some of those 8's yesterday. Some good % gains for day trading.
It’s here to stay.
8.81 > How can bitcoin survive in a sea of 1000's of cryptocurrencies worldwide!
MARA
Not buying this until we see Bitcoin at $12,500
Sold this turd Monday may get back if it goes to $7
As long as they remain profitable at 30K bitcoin price, this will be great..
Just need the rest of the miners installed and production running
Totally dependent on Bitcoin pricing.
MARA will Go up again. I stay long. Patience
Waiting for my 1.01 bid to fill.
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