Key Points
- Public Bitcoin mining companies raised $2 billion from equity financing ahead of the latest halving event.
- Marathon Digital, CleanSpark, and Riot Platforms held $1.33 billion in cash and over 32,200 Bitcoin (BTC) by the end of March.
Ahead of the most recent halving event, public companies involved in Bitcoin mining bolstered their financial resources.
Preparation for Halving Event
An analysis by BlocksBridge Consulting on the financial earnings of 12 public miners revealed that ten of these companies raised a cumulative $2 billion in gross proceeds through equity financing activities. This move was in anticipation of a potential decrease in profitability following the halving event. These same companies were able to raise $1.25 billion in the final quarter of 2023.
Marathon Digital, CleanSpark, and Riot Platforms were the primary companies raising capital in the previous quarter, accounting for 73% of the total funds raised. By the end of March, these three companies held a combined $1.33 billion in cash and over 32,200 Bitcoin (BTC), valued at over $2.2 billion.
Q2 2024 Funding Activity
The second quarter of 2024 is expected to witness a decrease in funding activity. BlocksBridge Consulting reports that “less than $500 million of investment was poured into subscribing major public mining stocks” as of May 15. Despite this, the investment amount is still higher than the third quarter of the previous year.
Bitcoin mining companies often use equity financing, which involves selling company shares to investors, to fund infrastructure, technological upgrades, and operational costs. This is particularly important in preparation for the Bitcoin halving event, which reduces mining rewards by roughly half every four years.
The first quarter of 2024 saw mixed financial results for miners due to rising BTC prices and mining costs. Riot Platforms reported a record net income of $211.8 million, marking a 1,000% increase from the same period last year. This occurred despite the company missing analysts’ estimates due to higher mining costs and reduced Bitcoin production.
Core Scientific, a company that recently emerged from bankruptcy, reported $179.3 million in revenue over the same period. Digital asset mining revenue exceeded mining costs of $68.4 million, resulting in a gross margin of 46%. Marathon Digital also fell short of Wall Street analysts’ revenue estimates, citing bad weather and equipment failures. However, the company’s revenues increased 223% year-on-year to $165.2 million, according to its earnings report.
