JPMorgan Highlights Miners’ Shift Toward Bitcoin Acquisition Strategies Used by MicroStrategy.

JPMorgan’s recent analysis reveals that crypto miners are increasingly adopting the same bitcoin accumulation strategy that has been championed by MicroStrategy (MSTR). This strategic shift is largely a result of growing profitability pressure, stemming from the bitcoin reward halving in April and a significant rise in the network’s hashrate, which has made mining more competitive and costly.

Hashrate, the computational power used to validate transactions and secure the blockchain, has been steadily increasing, driving up mining difficulty. This shift has prompted miners to hoard their bitcoin rather than selling it, or to seek further investments in bitcoin and even diversify into industries like artificial intelligence (AI) and high-performance computing (HPC), according to the report by JPMorgan analysts, led by Nikolaos Panigirtzoglou.

One major player, MARA Holdings (MARA), has amassed 35,000 BTC worth $3.5 billion, positioning itself as the second-largest public holder of bitcoin. This aligns with MicroStrategy’s strategy of accumulating bitcoin as a long-term reserve asset.

Miners are not the only ones involved in this growing trend. Semler Scientific, a medical device company, has also been acquiring significant amounts of bitcoin, adding $144 million worth to its balance sheet.

The introduction of spot bitcoin exchange-traded funds (ETFs) in January has provided institutional investors with a direct way to gain exposure to bitcoin, which has had an impact on miners. Historically, shares of mining companies were seen as a proxy for bitcoin, but the launch of ETFs has made these shares less attractive.

To avoid selling their bitcoin holdings to cover operational costs, many miners are turning to debt and equity offerings for financing. In fact, miners have raised over $10 billion in equity this year, surpassing the previous record of $9.5 billion in 2021, according to JPMorgan’s report. This growing reliance on external financing underscores the miners’ commitment to holding onto their crypto reserves while securing funding for expansion and growth.