As the hash rate of the bitcoin network continues to grow, the dynamics of the mining industry and the types of participants are more diverse than ever before. Of course, most bitcoin investors are familiar with the rumors of a historic partnership between self-mining, billion-dollar-market-value giants like Riot Blockchain, and energy titans like ExxonMobil and off-grid bitcoin miners. But beyond these few specific and expected corporate actors, the mining industry has seen a substantial increase in some heterogeneous entities launching pilot projects of various sizes to explore and gain exposure to mining.
From global shipping companies to health and wellness brands to cryptocurrency lending firms, mining is creeping into the business strategies of a growing number of unpredictable entities. This article reviews some lesser-known, unexpected companies that are exploring bitcoin mining.
health and wellness brands
Considering the popularity of non-vegetarian and seed oil-free diets in some bitcoin investor circles, news that a health and wellness brand has announced a mining venture may not be the biggest surprise. In June 2021, Florida-based Greystone Company, a self-described wellness, longevity and anti-aging company, announced its plans to grow the bitcoin mining venture it had launched a month earlier. At the end of September 2021 the company posted an update announcing that their operations had successfully mined approximately 0.1 BTC since launch, with a hash rate currently exceeding 2,000 TH/s and some more in the coming months. Thousands more are planned to come online. In January, Greystone said they were running a total of 50 Antminer S19j Pro machines—not bad for a wellness company.
cryptocurrency lender
When one thinks of corporate bitcoin miners, a lending firm is probably not the first business that comes to mind. But the two largest lenders in the general cryptocurrency industry are both actively mining with plans to expand.
In May 2021, BlockFi announced its new mining efforts as a partnership with the mining arm of Blockstream. How much hashrate BlockFi is managing through Blockstream was not disclosed, but the lender said they see mining as a way to complement their financial services offerings.
Celsius is also investing heavily in bitcoin mining, with $500 million spent on its mining efforts as of November 2021. In an interview, Celsius CEO Alex Mashinsky stated that his company operates 22,000 miners, most of which are Antminer S19 models. Like BlockFi, Mashinsky described his company’s mining efforts as a strategic complement to its lending business.
shipping logistics companies
Shipping companies don’t typically mine bitcoin, but in February 2021, a self-described global shipping and freight-logistics integrated solutions provider jumped into the bitcoin mining arena. New York-based China-Global Shipping announced a new executive leadership team just a year ago to lead its expansion efforts in bitcoin mining while focusing on its core business. (Hence, a sort of corporate strategy like Microstrategy’s iconic bitcoin-buying campaign, but for mining…) The announcement caused the shares of China-Global to rise 130%. Since the original announcement, the company has purchased a few thousand miners, entered into a joint venture to manufacture new mining hardware, and even accepted bitcoin as payment for its core services.
asset management firms
Some of the world’s largest investment banking firms are the largest shareholders for leading public market bitcoin mining companies. But how many investment banks and wealth management companies mine bitcoin themselves? At least one: Horizon Kinetics. The New York-based investment management firm launched its first bitcoin mining unit in 2017, followed by a second mining initiative in 2018. The company reportedly manages about $7 billion in assets, and they cited the reason for exploring mining as a way to better understand bitcoin. on one’s own. Horizon’s mining development strategy consists largely of purchasing several thousand miners and negotiating custody contracts for their hardware.
electric utilities companies
The fact that a multi-billion dollar, electric utility company has a subsidiary running a bitcoin mining pilot program may not be the most surprising development for the mining industry, given that mining may be in the energy markets of the near future. required location. But given that bitcoin mining as an industry is barely a decade old, the Hungarian subsidiary of E.ON is a leader in its own industry. E.ON’s Hungarian subsidiary has partnered with another Hungarian company, Enerhash, to set up a small mining operation at one of their plants to test its ability to improve the plant’s economics and performance in a variety of ways. To be. What makes this partnership even more curious is how some media outlets have discussed it. Perhaps E.ON’s lack of focus on Hungary’s mining activity was partly due to some of their press releases surrounding the operation written in Hungarian, while most of the mining news over the past year has focused on North and Latin America.
small technology companies
It is important to mention that not every company that announces new mining ventures or pilot projects is legit. Adding to the excitement and hype of bitcoin mining, many of these companies – typically publicly traded technology firms with small market capitalizations – are relying on desperate gimmicks to boost their share prices. Publishing a press release about bitcoin mining is easy. It is very difficult to build a sustainable mining operation.
Therefore, in the case of many smaller companies that make similar declarations, it can be difficult to determine which are legitimate mining sector explorations and which are not. But the risk of that context has a huge impact on the company named in this paragraph, an example of a smaller technology company that appears to be actually mining is Jasmine Technology. The publicly traded, Thailand-based telecom company publicly disclosed its plans to launch bitcoin mining in December 2021, leading to a 6,700% jump in its share price. At the time of the announcement, Jasmine Technology reportedly operated 325 miners and mined 8 BTC.
Does everyone want my bitcoins?
Investing in mining, either directly or indirectly, makes a lot of financial and strategic sense to a multitude of investors and businesses. And to see so many different types of participants entering the mining market is, in this author’s view, fantastic. Even though there are many companies working to provide products and services so everyone can possibly mine bitcoins, this does not mean that everyone should start mining immediately. Every new miner needs a sound strategy and a slow, measured start to its operations. The hash rate of bitcoin has been increased by hundreds of failed miners who had poorly planned. A successful mining operation always starts slowly and carefully. Careless and random beginnings never end.
conclusion
Even though energy titans and multi-billion-dollar self-mining companies dominate today’s corporate mining landscape, a growing number of atypical businesses are incorporating bitcoin mining. There are some drawbacks to the wider interest of these entities, even though bitcoin mining is a relatively nascent and risky industry. How many of these operations will last more than one bitcoin market cycle is an open question. But rather than just buying bitcoin, corporations that want to mine it are also a special class of bulls in their own league.
This is a guest post by Jack Voel. The opinions expressed are solely their own and do not necessarily reflect the views of BTC Inc. bitcoin magazine,