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Bitdeer, a cryptocurrency mining company based in Singapore, has completely divested its bitcoin holdings, taking a novel direction in its financial strategy as of February 20. Starting the year with around 2,000 bitcoins, the company steadily dissolved its reserve over the past months, culminating in an unprecedented zero bitcoin balance.
Why Move Away from Bitcoin Reserves?
The decision deviates from conventional mining practices, which typically involve holding onto bitcoin. According to Bitdeer, its recent production involved the sale of 189.8 $BTC and the final clearance of 943.1 $BTC through a single transaction, effectively distancing itself from reliance on bitcoin reserves.
How Are Economic Challenges Affecting Miners?
Rising economic challenges have precipitated Bitdeer’s shift. The Bitcoin mining landscape has grown more challenging due to a 14.7% increase in mining difficulty and a significant decrease in hashprice, diminishing profit margins dramatically. With its gross profit margin falling to 4.7% at the end of the previous year, Bitdeer is feeling the financial strain that many miners are now facing.
Focusing beyond bitcoin mining, Bitdeer is channeling funds into high-performance computing (HPC) and artificial intelligence (AI) initiatives. The firm raised $325 million via convertible bonds and an additional $43.5 million through a stock issuance. These funds aim to bolster data center capacities and enhance advanced mining technology.
Does Bitdeer’s Sale Signal a Bitcoin Decline?
Bitdeer clarifies that the full sale of its bitcoin holdings is not a sign of waning trust in bitcoin. The company highlighted that liquidity requirements and infrastructural growth, rather than a bearish outlook on bitcoin, propelled this decision.
“We do not view our decision to sell bitcoin as cause for broader market concern,” the company’s statement read.
The company has experienced a remarkable increase in output lately, producing 668 $BTC just in January—a notable rise by 430% from the previous year. Despite this high output, the firm chose to cash in these bitcoins rather than hold them, aligning with their current strategy.
By becoming the first significant publicly listed miner to report zero $BTC reserves, Bitdeer distinguishes itself from major players like MARA Holdings and Riot Platforms, who maintain vast bitcoin reserves. On the other hand, MicroStrategy retains a record 717,000 $BTC, highlighting Bitdeer’s unique approach.
There is an emerging shift in focus toward AI and HPC within the mining industry. Bitdeer’s investment in AI cloud projects, such as those in Malaysia, indicates a broader industry trend toward AI-driven operations, diverging from sole reliance on crypto mining.
Presently, Bitdeer has not revealed any intentions to reinstate bitcoin reserves in its near-term strategy, keeping the company’s future treasury moves uncertain as it emphasizes AI and HPC growth. Concurrently, bitcoin itself has seen price volatility, recently dropping below $65,000, hinting at broader market movements that Bitdeer’s strategy may be preemptively addressing.