Optimistic Bitcoin Miners Persist Amidst the Most Challenging Bear Market to Date – Hut8, Foundry, Braiins Hold Steady

Bitcoin miners ain’t backing down, even in the toughest bear market they’ve faced yet! Hut8, Foundry, and Braiins are facing a real challenge in this 2023 downturn, having to sell freshly minted Bitcoin to cover their operational costs.

The past year has been rough for these miners, with a massive amount of BTC being sent to centralized exchanges to handle their expenses.

But hey, it’s not all bad news. The Bitcoin mining industry has had its ups and downs, and in 2023, they hit a remarkable high, raking in a whopping $184 million from transaction fees in the second quarter alone! That’s thanks to the BTC price bouncing back and all the hype surrounding those BRC-20 tokens.

And it’s not just the fees; mining firms’ stocks have been soaring, outperforming Bitcoin’s market value by a long shot. Those top nine public Bitcoin mining companies saw their market capitalization shoot up by an incredible 257% since the beginning of the year.

But let’s get real here. Miners are still having to sell their hard-mined BTC to keep things running smoothly during this ongoing bear market. June 2023 saw miners sending a record $128 million worth of Bitcoin to exchanges. These experts are saying that miners are taking precautions, looking to reduce risks by offloading BTC to exchanges. Some say it’s about hedging in the derivatives market, others claim it’s for OTC orders, or maybe they’re just shifting funds around for various reasons.

We wanted to hear straight from the horse’s mouth, so we reached out to some big mining companies to see what’s what.

Hut8’s CEO, Jaime Leverton, told us about their recent merger with USBTC, which hasn’t made things easy for raising capital through the market offering. That’s why they decided to sell some of their Bitcoin holdings and newly produced BTC to cover their operating costs:

“Once the merger’s done, we’ll revisit our treasury strategy. But for now, we’re still holding on to more than 9,100 BTC ($271 million) and remain bullish on Bitcoin – we’re HODLing!”

Hut8 was transparent about their recent transactions, selling 217 Bitcoin mined in May and June for $7.9 million.

Foundry’s Charles Chong joined in on the conversation too, but he didn’t spill the beans on whether they held any BTC in 2023. According to him, back in the bull market days, miners were raking in a sweet 60-80% margin on production, with plenty of external capital to spare, so they held onto their mined BTC.

But times have changed, and now there’s a scarcity of external capital, and margins have dropped to 15-30%, pushing miners to liquidate their Bitcoin to cover their operational costs.

Chong reminds us that comparing today’s market conditions to the bear markets following the 2017 and 2021 peaks is like apples and oranges. Bitcoin mining works in cycles; when times are good, miners invest heavily in ASIC mining equipment. But now, they’re adapting by refreshing their fleet with more efficient mining gear capable of higher hashrates to keep producing BTC at a profit.

Oh, and speaking of hashrates, they’re hitting all-time highs, which means the network’s stronger than ever! That’s because new and better mining equipment keeps hitting the market in 2023. But there’s a trade-off – total energy usage by the network is creeping up too, though at a slower pace. It’s all part of the increasing investment in network security.

Braiins mining shared their thoughts, telling us that the continuous difficulty increases are a sign that miners believe BTC’s future price will rise. They’re optimistic and still able to profitably deploy their machines in this current environment.

But it hasn’t been all sunshine and rainbows. Some mining firms, like Core Scientific, had to call it quits and filed for chapter 11 bankruptcy in June 2023. Still, they’re not giving up, as they’ve managed to raise some serious capital and are planning a reorganization in September 2023.

So, despite the tough times, Bitcoin miners are resilient, staying bullish on their beloved BTC and keeping the faith in the future. And with the market being as dynamic as it is, who knows what surprises lie ahead? But one thing’s for sure – these miners are in it for the long haul!