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Bitcoin mining companies channeled a significant portion of their fund raises into machine and infrastructure upgrades.
Miners Raise Big and Invest Big in Bitcoin Mining
16 publicly traded bitcoin mining companies have raised more than $5 billion in 2024, according to theminermag.com. The report also revealed that Q3 had the biggest property, plant, and equipment (PP&E) expenditure since Q1 2022 with over $3.6 billion spent on mining upgrades.
The bulk of the PP&E spending was on modifications to mining hardware, including the acquisition of new mining sites and technology.
This ongoing investment in hardware and infrastructure is in line with the surge in the Bitcoin network hashrate which measures the amount of computing power used for BTC mining worldwide. Despite the halving of bitcoin earlier this year, the hashrate recently reached an all-time high of about 790 exahashes per second (EH/s).
On the other hand, mining businesses’ stock fundraising slowed down with only $813 million raised in Q3, down from $1.6 billion in Q2. Nonetheless, debt finance returned, as Q3 2024’s debt issuance was the most since Q1 2022, with mining businesses raising $500 million.
An example of mining companies’ shift from equity financing to debt financing is MARA Holdings’ recent $1 billion issuance of 0% convertible senior notes which was used to finance the purchase of 5,771 bitcoin. Also, a notable trend in 2024 is the growing emphasis on sustainable mining practices with miners seeking to balance profitability with environmental responsibility.