According to JPMorgan’s latest report, miners are adopting the same strategy in Bitcoin implemented by MicroStrategy in recent years.
The bank noted that miners are financing their activities by issuing bonds and stock offerings, without using their own Bitcoin reserves.
All of this is very bullish for Bitcoin, which reduces its potential selling pressure and at the same time increases demand in the market.
All details below.
MicroStrategy and the Relentless Accumulation of Bitcoin with the BTC Yield Strategy
According to JPMorgan, miners would have begun to accumulate Bitcoin thanks to a “BTC performance”, the same one adopted as a standard by MicroStrategy.
We are talking about a strategy that aims to maximize the value of a company’s shares through the incessant purchase of the main cryptocurrency in the crypto market.
Technically, BTC performance is a key performance indicator (KPI) that measures the exchange rate of Bitcoin per share.That is, how many BTC the company is able to obtain for each share in circulation.
MicroStrategy, under the direction of CEO Michael Saylor, is trying to increase the “BTC per share” ratio using only its internal resources.
In practice, the business intelligence company covers the accrual costs by using its cash reserves and raising money from investors with private offers.
The advantages of this tactic are numerous, including investment portfolio diversification, increased inflation protection, and stock appreciation.
Thanks to this approach, MicroStrategy has managed to accumulate more than 423,650 Bitcoin in just 4 years. for a total value of approximately 25.6 billion dollars.
The company’s investment has generated an unrealized profit of $18.8 billion, while the value of MSTR shares has increased 500% since the beginning of the year.
In parallel, MicroStrategy has raised its BTC yield to a quarterly rate of 38.7% and an annual rate of 63.3%much more than what was set in January 2024.
A higher BTC yield means that each MicroStrategy share becomes more valuable as the amount of Bitcoin accumulated increases.
Miners renew the success of the MicroStrategy method
As New York bank JPMorgan noted, Bitcoin miners are following in MicroStrategy’s footsteps.
Instead of liquidating their BTC reserves to cover production costs, North American crypto mining companies are using alternative methods.
For example, Mara Holdings recently announced a convertible senior stock offering, raising $850 million.
This mining company has issued bonds (irregular interest) maturing on March 1, 2030, and investors can convert them into cash and/or behavior.
The money was partly used to buy Bitcoin on the market, bringing their total holdings to 35,000 BTCvalued at approximately $3.5 billion.
Using this “BTC yield” tactic has allowed Mara to become the second public holder of the orange cryptocurrency after MicroStrategy itself.
According to JPMorgan, the shift toward accumulating bitcoin holdings is driven by Increasing pressure on miners’ profitability..
After the last block reward halving in April and the rise of the Total Hashrate, miners had to find new incentives to stay afloat.
Additionally, shares of mining companies have become less attractive in the market as institutional investors have gained direct access to Bitcoin through spot ETFs. As a result, in 2024, shares of Bitcoin miners, which were previously considered a substitute for Bitcoin, underperformed the benchmark.
Obviously, all this provides a bullish stimulus to the currency, which sees a reduction in some of the potential selling pressure from extraction workers.
At the same time, demand in the crypto market increases, driven by the accumulation resulting from the MicroStrategy method.
Diversification and new investments for miners.
JPMorgan points out that The miners, in addition to copying MicroStrategy’s strategy focused on Bitcoin, have strongly diversified their investments.
The bank led by CEO Jamie Dimon noted that new market challenges have led miners to focus heavily on the artificial intelligence and high-performance computing sector. As the group’s analysts literally wrote:
“This has likely pushed miners to accumulate or seek more investments in bitcoin or diversify into AI/HPC activities.”
This diversification is motivated by the need to find new sources of income and improve corporate sustainability.
For example, Scientific core has signed a 12-year contract to host AI serviceswhich demonstrates the growing interest in these technologies.
The same company actively purchased Bitcoin, increasing the value of its holdings to $144 million.
This strategic change allows miners to make better use of their energy resources and reduce their exclusive dependence on mining.
JPMorgan notes that miners have raised more than $10 billion in equity capital this yearsurpassing the previous record of 9.5 billion recorded in 2021.
These funds are used to invest in advanced infrastructure, such as data centers and next-generation GPUs, necessary to support AI and HPC operations.
