Blockstream Bets on “Huge Correction” to Sell Mining Rigs Post-Halving
Blockstream, a Bitcoin infrastructure company, is purchasing mining rigs in anticipation of a significant price rebound after the next halving event. Here are the key points:
– Blockstream expects the price of mining rigs, which are used to clear Bitcoin transactions, to surge after the spring 2024 halving.
– The halving event reduces the number of Bitcoins awarded to miners, requiring them to have more machines to earn the same revenue.
– Blockstream plans to raise $5 million through the Blockstream ASIC Note and hopes to offer more tranches in the future.
– The company believes there will be a price correction where ASIC prices will align with the Bitcoin price.
– Blockstream CEO Adam Back sees a financial opportunity in buying and selling miners.
ETF Approvals Could Complicate Inflows For Public Miners
Approval of a spot Bitcoin exchange-traded fund (ETF) by the SEC could pose challenges for mining companies. Here are the key points:
– Investors may choose the ETF over mining stocks for Bitcoin exposure, potentially impacting mining companies’ inflows.
– Mining companies must ensure they have enough capital to handle potential outflows from investors.
– Setting up operations in different regions can help lower risk for mining companies.
– BitDigital aims to boost its mining power by adding more exahashes in different regions ahead of the halving.
Mining Power and Current Hashrate
Despite the bear market, the combined hashrate of all mining equipment is currently around 386 exahashes per second. Here are the key points:
– Mining power is measured by the number of guesses an ASIC can make in one second.
– Modern mining machines can generate over one quintillion guesses per second.
– The current Bitcoin algorithm rewards each miner with $182,044.38 plus transaction fees for a correct guess.
Hot Take
Blockstream’s strategy to purchase mining rigs in anticipation of a price rebound after the halving is a calculated move. However, the potential approval of a Bitcoin ETF could complicate matters for mining companies. Ensuring sufficient capital and diversifying operations will be crucial for miners to navigate the post-halving landscape.
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