PubCos Tap?? Capital ?? Markets in Q3 As BTC Heats ?? Up to $37K
Mario Andres Gutierrez, Msc
Critical Energy & Digital Infrastructure | Email in Contact Info
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W45 ‘23 Vibe Check
The Overview Vibe
Bitcoin rocked up to $37,000 for the first time since April 2022 during a busy week of Q3 public sector earnings and further network growth. Transaction fees peaked at 40+% of block rewards thanks to another ordinal wave that has increasingly congested the mempool over the last month. As hashprice peaked at $94/PH/DAY midweek, it swiftly shifted to $79/PH/DAY as difficulty adjusted upwards to 64.68 T at the end of the week. Hashrate continues to chase price as difficulty extends its 5-epoch upward adjustment run well into the Thanksgiving holiday.
As J.Powell reminds us to “just close the fucking door” to the haters, trad-fi continues to dance closer towards further adoption of the space. Even though the SEC subpoenaed PayPal over their stablecoin, Gary G’s agency expressed openness to talk with Grayscale regarding their Spot BTC ETF. As several of the spot ETFs are expected to be approved shortly, CME overtook Binance for the largest % of Bitcoin futures open interest (chart below). Will the suits be here for good?!
The dust continues to settle across from the earlier explosions this year as Celsius is set to rise from the bankruptcy ashes alongside their MAMMOTH USBTC-managed mining business. Creditors will look to receive 65-85% of their holdings as the mining and staking NewCo will look to create longer-term value. As the FUD cloud over DCG continues to linger, Vijay Boyapati published a great look-back thread summarizing why Barry Silbert and DCG may overshadow SBF’s fraud.
With Q3 earnings trickling in from the public sector, miners announced strategic updates and reloaded on dry powder from the capital markets thanks to recent BTC price tailwinds. The Hut 8 - USBTC merger is expected to be complete by Nov 30th after getting the final ???? from the SEC. Bitdeer jumped onto the AI hype train with an Asia-based cloud service. Marathon continues to globalize its footprint with its announced 27 MW joint venture with Penguin Digital in Paraguay. Cipher Mining announced the purchase of 1.2 EH/s of S21 ASICs alongside its $7M acquisition of the “Black Pearl”. Texas greenfield site that is scalable to 300 MW from Trinity Mining.
Many peers are expected to announce similar Q3 equity raising efforts to Bitfarms’ $31M and Riots's $230M as miners look to expand their sites and replenish their rackspace ahead of the halvening. Miners who haven’t reloaded on the latest ASICs are banking on operational efficiencies, attractive secondary ASIC market ROIs, and power trading strategies to offset lower network hashrate share. Oilfield mining padrino Steve Barbour provides a great overview of how the “max ROI” in the business might be different from what public miners are announcing (see linked post above).
As we head into winter aka the colder shoulder months, we can expect miners to lean even more into their power strategies the winter ahead of the halvening. Riot shared a great graph showcasing (above) the economic incentive to trade their power and participate in other grid service programs. While Riot derped PR-wise back in August as they were PRINTING MOOLA, I do want to give them their flowers for really delivering impactful communication (AKA THIS CHART) regarding their power strategies.
While gas may not be popping like it did last year, I am sure miners are ready to curtail and support the grid if this winter is chiller than last year. I do wonder if we will start to see more ISO/geographic defined curtailment during this winter as miners continue to mature their power strategies. Will we see Wall Street start to value miners differently based on initial signals from their specific gas/power-hash rate strategies and not solely on BTC mining margins?
As turkey day is around the corner and the price is pumping, let’s remember to chill baby chill, and look to orange pill our loved ones with positive vibes only. I'll be at the Texas Blockchain Council's #NorthAmericanBlockchainSummit (NABS) in ?? Town USA aka #ForthWorth ?? Texas this week! I look forward to connecting with friends, colleagues, and peers. Give me a shout to grab time and catch up! Nos vemos!
Bitcoin/Mining Metrics
Sources: Hashrate Index1, Bitbo2
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1 年Excited to start my week by checking out the latest in #bitcoinmining through your newsletter, Mario! Subscribing now for my weekly dose of energy insights. ??? #EnergyTrends #VibeCheck
Technical support expert, bitcoin miner, technology explorer.
1 年So many things I covet :)