It’s a tough atmosphere that could see an industry shakeout, reminiscent of the 2018 bear market that saw the price of the world’s largest digital asset collapse to nearly US$3,000. With Bitcoin prices now moving in the opposite direction of global processing power, the pressure is on. And while profit margins are still over 70% for the bigger players – making Bitcoin mining one of the most profitable industries, comparable to luxury goods and pharmaceuticals – leaders of some of the largest companies say they’re arming themselves against what-if scenarios.
Crypto miners are hunkering down for a possible squeeze as rising costs, swinging Bitcoin prices, and now a war in Ukraine threaten to erode the industry’s substantial profit margins.
Companies are tapping debt markets, shoring up balance sheets and credit lines, and even filing to sell shares in order to raise more cash. Marathon Digital Holdings Inc. and Hut 8 Mining Corp. are among the most recent companies to reach for planned stock sales, and a just-in-case move could prove prescient with the price of Bitcoin hovering around US$41,000 ($55,998.20).
