Some Bitcoin miners sell the cryptocurrency they mine on the network to pay their expenses, while others are amassing the largest treasuries in the industry. Why?
The analysis firm Arcane Research has an answer. In one of its latest reports, Arcane Research indicates that the absence of a Bitcoin ETF, which allows companies to directly expose themselves to the potential of this cryptocurrency, is motivating the holding by companies dedicated to Bitcoin mining.
Currently, the American crypto mining company Marathon Patent Group is the largest Bitcoin holder in this sector. The company holds a stash of over 9.600 BTC, valued at around $289 million at press time.
Marathon Patent Group is closely followed by Core Scientific, Hut 8 Mining Corp, Riot Blockchain and Bitfarms as the top five Bitcoin mining companies in North America.
It may interest you: Norwegian parliament rejects ban on Bitcoin mining
Most of these companies do not sell the cryptocurrencies they mine within the network. In fact, Core Scientific has increased its computing power on the Bitcoin network exponentially in recent months, so much so that it will soon surpass Marathon Patent Group's BTC holdings.
Source: Arcane Research
Likewise, Hut 8 Mining's head of relationships, Sue Ennis, told Bloomberg earlier this year that the company will continue to increase its BTC reserves in the future.
“We believe in bitcoin. Some miners sell bitcoin or use it to pay expenses. We keep our bitcoin", Ennis said.
Bitcoin mining companies also continue to accumulate more units of this cryptocurrency as they seek to become New indirect investment vehicles in BTC for its shareholders and investors, said the firm Arcane Research.
Big miners have no intention of selling their bitcoins
Publicly, these Bitcoin mining companies have stated their intention not to sell their cryptocurrencies, maintaining a strategy that Arcane Research referred to as “mine-to-hodl.”
Bitcoin mining firms such as Marathon Patent Group have even implemented more aggressive Bitcoin accumulation strategies than their counterparts. Arcane noted that in December 2020, Marathon Patent Group acquired over 4.800 BTC to significantly increase its holdings in the cryptocurrency and become “one of the only pure Bitcoin investment options.”
Thus, the strategy implemented by this important Bitcoin mining company also sought to be a more attractive Bitcoin investment vehicle for investors.
Bitcoin is one of the most attractive investment assets
Arcane Research noted that one of the most direct ways for crypto mining companies to remain as correlated as possible with the price of Bitcoin is through holding.
The popular cryptocurrency, which remains the leader of the crypto industry with a market capitalization of more than 575.500 million Currently, it has become one of the most attractive alternative investment assets for investors in recent years.
Therefore, the high demand for Bitcoin has also become an incentive for large mining companies to keep the cryptocurrencies they earn within the network under their custody and continue accumulating more BTC.
Let us remember that the miners of the Bitcoin network, which is based on the consensus mechanism Proof of Work or proof of work, they are rewarded with a certain amount of BTC for the work they do to verify and validate transactions within the blocks of the network and for ensuring its security and stability.
Currently, miners of this cryptocurrency receive a total of 6,25 BTC (approximately $186.400) as a reward from the network. This is also in addition to the commission fees paid by users to confirm their transactions.
Buy Bitcoin (BTC) at Bit2Me
Continue reading: Riot Blockchain to boost Bitcoin mining by adding 1 GW of power from Texas
