Claiming that the Bitcoin mining business has gradually become unpredictable, Cathedra Bitcoin announced that it will gradually withdraw from the Bitcoin mining business and instead focus on developing data center services and purchasing Bitcoins on the open market with business proceeds. Following Marathon Digital, this is the second mining company to announce that it will adopt a MicroStrategy strategy in the future.
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ToggleMining profits are unstable, Cathedra transforms data center
The Cathedra Bitcoin statement pointed out that mining profits have fluctuated so much in the past three years that mining is no longer a reliable way to accumulate Bitcoin. Especially with events such as the Bitcoin halving, mining competition has intensified and profits have gradually declined.
Cathedra emphasized that the company’s main goal is to accumulate Bitcoins for shareholders, and mining can no longer achieve this goal , so it decided to turn to operating data centers and use the stable cash flow of this business to purchase Bitcoins.
MicroStrategy Strategy Effect: Measuring the number of Bitcoins per share
According to previous reports , MicroStrategy founder Michael Saylor took the lead in promoting the strategy of listed companies purchasing Bitcoin on the open market, and inspired mining companies including Marathon Digital to follow suit, which also triggered discussions on its own business operations.
Cathedra pointed out that many listed Bitcoin mining companies currently hold fewer Bitcoins per share than three years ago, while companies such as MicroStrategy have gained the favor of stock market investors by continuing to increase the number of Bitcoins per share.
It emphasizes:
Transforming into a data center business and using the proceeds from this business to purchase Bitcoin on the open market can effectively increase the company's growth in Bitcoin per share.
Miners expand operations to cope with selling pressure
As Bitcoin’s hash rate reaches an all-time high, miners’ daily profits have plummeted. JPMorgan Chase also recently pointed out that miner profitability is at historical lows as the overall computing power has increased for five consecutive months and returned to pre-halving levels.
In a high-pressure competitive environment, many mining company stocks have experienced selling pressure, and mining companies such as Core Scientific and Applied Digital that announced their expansion into high-performance computing (HPC) and AI computing power hosting businesses have gained the favor of investors.
Cathedra plans to raise debt to increase Bitcoin holdings
In addition to the data center business, Cathedra also plans to increase capital through equity and Bitcoin derivatives to further increase its holdings of Bitcoin. It will also retain its existing mining equipment and output, but its main focus will be on more reliable predictive data center business and continues to explore new sources of funding for growth.
Cathedra believes that by transforming into a data center business, the company will be able to achieve stable cash flow and use the above resources to continue to increase its holdings of Bitcoin and create more value for shareholders.
