Two of the world’s biggest Bitcoin miners are short on cash, reports Bloomberg, and they’re eyeing stock sell-offs to survive a potential extended bear market.
Canadian outfit Hut 8 and Vegas-headquartered Marathon Digital Holdings have both filed with the US Securities and Exchange Commission (SEC) for the option to trade shares for cash.
The move comes just days after both public companies vowed they would resist dumping any of their prized Bitcoin.
To be expected, both companies’ stock are highly correlated with Bitcoin. Their share prices are currently sitting at around half their November highs while Bitcoin itself is down about 30% from its November all-time record.
Hut 8 has filed to sell $65 million worth of common shares while Marathon wants to offer up $750 million in shares, stock, warrants, and units.
“We don’t control the price of Bitcoin, but we can control how prepared we are to capitalize on market opportunities when they present themselves,” said a Marathon spokesperson (via Bloomberg).
In order words, Marathon would like to dump its Bitcoin for more money sometime in the future.
Bitcoin stocks better hope it recovers
Reserves of Bitcoin miners have slowly increased over the past year, but that’s changing.
Bloomberg recently noted that a Glassnode metric for changes to Bitcoin miner balances had just flipped negative for the first time since mid-November.
Many smaller mining companies, especially private firms without shareholder pressure, are selling off tokens to either keep their heads above water or invest in new equipment.
But this can be a delicate and risky balancing act. “The machines got a lot more expensive. If you promised to raise your exahash to a certain level, it’ll cost you 20% to 30% more to get there,” said B. Riley analyst Lucas Pipes to reporters.
Still, none of this concerns the market’s bigger players — as long as Bitcoin recovers before their balance sheets feel the hurt.
As such, the likes of Hut 8 and Marathon Digital Holdings can be slightly more selective about where their extra funds come from, and simply offload their stock instead.
“We [Marathon] started [holding Bitcoin] in October 2020, and since then, we have not sold a single satoshi,” reportedly claimed a company spokesperson.
This sentiment was echoed by Hut 8‘s investor relations head Sue Ennis, who said:
“We are believers in Bitcoin. Some miners sell Bitcoin or use it to pay expenses. We hold ours.”
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Edit 19:35 UTC, Feb 15: Wording in paragraph 4 for clarity.