Crypto analysts, traders and anonymous influencer Bitcoin experts
According to the strategy, Bitcoin miner rewards sent to exchanges indicate impending selling pressure on the Bitcoin price and may reflect miners’ distress.
Elements of this methodology were questioned by a number of listed Bitcoin miners at the Bitmain World Digital Mining Summit in Hong Kong last week.
Bitmain WDMS panel on Bitcoin mining and renewable energy. Source: Cointelegraph
According to Jeff Taylor, Core Scientific EVP of Data Center Operations,
“Core Scientific could be the poster child of the HODL strategy. We created a hoard of 10,000 Bitcoins and pushed it to the limit, and then that led to some financial difficulties that we’re now trying to get out of. What we do today is that we sell our Bitcoin production every day. I think it’s because of these three things. How and where can you reduce costs, how and where can you increase efficiency, and what new financial innovations can you bring to your treasury or energy programs to fundamentally stabilize the profitability of your entire business.”
Panelists Taylor Monning and Will Roberts of CleanSpark and Iris Energy agreed with Core Scientific EVP Jeff Taylor and mentioned that their respective companies also sell a majority of their mined BTC.
Monning said:
“CleanSpark’s strategy was completely different, so we were very conservative during the bull market and got a lot of grief because of it. We sold Bitcoin up to the maximum price of $60,000 and that too caused us a lot of grief. But I think everyone has seen that our strategy has kind of paid off this year with the expansion that we’ve done to 9.5 exohash and now we’re starting to increase our hodl like you probably have in the last few If you’ve seen Bitcoin for a few months, the price is much lower. That’s why we took a much more conservative approach in the bull market. “Building in the Bear” has been our company’s motto and I think we will continue to expand on this goal. I think people learned a lot in the last market cycle and I think the CleanSpark strategy will be adopted by many other miners in the future.”
Will Roberts, co-founder of Iris Energy, added:
“Since we started mining, we have sold all of our Bitcoins every day. I mean, from our perspective, mining Bitcoin and running data centers is a very different business model than investing in an asset like Bitcoin. Our business is to generate shareholder value. Our strength is operating data centers and generating cash flows for investors. We believe that we can actually generate more value by selling a Bitcoin today and earning that Bitcoin and something later in the future, and we have the ability and the expansion opportunities to do that, or potentially at some point in the future pay a dividend, be it in cash or Bitcoin.”
According to Nazar Khan, co-founder of TeraWulf,
“I think the last bull market seems like ages ago. In my opinion, all the approaches we had back then are long gone and we have optimized and modified the current status a little. Similar to some of the other people here, we have sold every Bitcoin we produce and basically at TeraWulf we think we are a converter. We take a kilowatt-hour of electricity, run it through the miracle ASICs Bitmain makes, and produce hash on the backend. We evaluate this every day on how efficient we are in this conversion process. We tell our investors that we are converters and measure ourselves by how efficient we are in this conversion process. This means we monetize every Bitcoin we sell on a daily basis.”
Related: At the World Digital Mining Summit, Bitcoin miners are increasingly focusing on efficiency and renewable energy
So are Bitcoin analysts doing it all wrong?
When asked about the accuracy and methodology of on-chain metrics like Charles Edwards Hash Ribbons Indicator, Khan quipped:
“I think the business of being an analyst is extremely difficult because, by definition, you’re probably wrong. Having said that, I think that might have been a good move in the past because in the past when we saw margins over 80%, there was no need to sell, you didn’t need to monetize every Bitcoin produced. I think if we look at most companies today, given the growth plans that we have. The only source of income we have is the margins we make from mining Bitcoin or raising additional capital, and the capital markets we use to grow our businesses have been tight over the last few years, so at least I think so for the future For listed miners, looking at their Bitcoin selling strategies is not necessarily a direct indicator of capitulation or distress. It’s more about how this fits into their position today and their growth plans for tomorrow and how this meets their capital needs. ”
Foundry Vice President Kevin Zhong’s statements also echoed the views of listed miners at WDMS.
Foundry SVP Kevin Zhang talks about the Bitcoin halving. Source: Cointelegraph “The ideal scenario is to rely on our hope that Bitcoin will actually rise and that our problems will go away on their own, that is not guaranteed.” The economic incentives for Bitcoin to go it alone may not be there or may not yet be Occur 6 or 12 months after the halving. In this scenario you really have to get creative. What do we do with the block space, how do we drive up the fees? What other ways are there to subsidize ourselves and the miners? You also need to be very critical and strategic about what you do with the Bitcoins you mine. Do you protect yourself and make covert calls? What are your treasury plans? If you are bullish on Bitcoin, will you liquidate it all or keep some of it? It requires a lot of layering and modeling, endless modeling.”
To hear the full discussion on Bitcoin miners’ transition to renewable energy, the growing synergy between energy producers and BTC miners, and miners’ views on the upcoming halving, check out the WDMS panel here.
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their own research when making their decision.
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