In an era of digital world, Bitcoin and other forms of digital currencies have gained much popularity over the years. People have minted great amount of profits by selling and buying Bitcoins.
Let’s take a look at some of the largest Bitcoin mining companies by market captalization, according to the data from CompaniesMarketCap.
Read: What is Bitcoin mining and how does it work?
What is Bitcoin mining?
Bitcoin mining involves solving mathematical equations to process transactions on the blockchain and earn rewards. In doing so, miners participate in the proof-of-work (PoW) consensus process and are rewarded for their labour, equipment, and power costs. New BTC coins are also produced. As the challenges get harder, mining bitcoin becomes more profitable but requires more advanced technology since it slows down the asset’s supply growth. The biggest bitcoin mining firms have thousands of machines that are capable of solving equations more quickly than a person. The entire amount of Bitcoin they get in exchange is what is regarded as the company’s income. The electricity required to run the equipment and mining maintenance are among the expenses associated with operating large bitcoin mining firms.
Marathon Digital Holdings (Market cap: $5.01 billion)
MARA is a global leader in digital asset compute that develops and deploys innovative technologies to build a more sustainable and inclusive future. MARA secures the world’s preeminent blockchain ledger and supports the energy transformation by converting clean, stranded or otherwise under-utilized energy into economic value. The company helps solve the challenges of energy transformation by providing innovative solutions to the energy sector and beyond. The firm’s goal is to convert unused or under-utilized energy, like excess generation from renewables, and alternative sources, such as captured methane and biogas, into economic value. It also offer advanced technology solutions to optimize the data center operations.
CleanSpark (Market cap: $2.84 billion)
CleanSpark responsibly develops infrastructure for Bitcoin. It strives to leave the planet better than people found it by investing in communities that source low-carbon energy, like wind, solar, nuclear and hydro. The company helps to redefine the landscape of traditional finance and policies surrounding it. Through advocacy, education and strategic partnerships, it is showing how Bitcoin can democratize access to wealth. The company owns and operate multiple data centers that primarily run on low-carbon power.
Read: Will Bitcoin mining ever be environment-friendly?
Phoenix Group (Market cap: $2.66 billion)
Phoenix Group has a significant presence in key regions like the United States, Canada, Europe and the Middle East. As a major contributor to the global hash rate, the company is a cornerstone in the crypto mining landscape. It offers unparalleled mining services on a global scale. The firm’s vast 725MW mining operation leverages the latest technology and premium hardware, and ensures efficient and reliable mining services tailored to the evolving needs of the cryptocurrency domain.
Core Scientific (Market cap: $2.50 billion)
Core Scientific, Inc. engages in the business of operating a purpose-built facility for digital asset mining and provision of blockchain infrastructure, software solutions, and services. It operates under the mining and hosting segments. The mining segment focuses on Bitcoin mining for the company’s own account. The hosting segment includes blockchain infrastructure and third-party hosting business. It has been mining Bitcoin at scale for years and has become one of the largest in North America, setting the pace for the industry. The company has deployed, energized and maintained more than 600,000 miners, gaining invaluable experience and knowledge along the way.
Riot Blockchain (Market cap: $2.44 billion)
Riot is a Bitcoin mining and digital infrastructure company focused on a vertically integrated strategy. The company has Bitcoin mining operations in central Texas and Kentucky, and electrical switchgear engineering and fabrication operations in Denver, Colorado. Riot platforms has initiated a large-scale, 1 gigawatt development to expand its Bitcoin mining and hosting capabilities in Navarro County, Texas with its new Corsicana facility. Development of the Corsicana facility has begun with an initial 400 megawatts of capacity on a 265-acre site. The substation was energized in April 2024 and mining operations have begun. Moreover, the two operational sites, both in Kentucky, total 60 MW of operational capacity.
Iris Energy (Market cap: $1.40 billion)
The company is responsible in powering Bitcoin, AI and beyond. It owns and operates next-generation data centers powered by 100 percent renewable energy. Iris Energy targets regions where there are low-cost, abundant and attractive renewable energy sources, and where it can help solve energy market problems. Its facilities are powered by 100 percent renewable energy and are well placed to service power-dense applications, such as Bitcoin mining and GPUs – including NVIDIA H100s.
Read more: Bitcoin hits new two-year high, surges over $65,000
TeraWulf (Market cap: $1.26 billion)
TeraWulf develops, owns and operates fully integrated Bitcoin mining facilities in strategic locations across the United States. It generates attractive investor returns while providing sustainable benefits for the community. The company focuses on plug capacity to ensure flexible growth through dynamic markets. Its vertically integrated, infrastructure-first strategy ensures the ability to create and take advantage of plug-ready digital asset infrastructure. The firm builds sustainable, scalable facilities utilizing 95 percent zero-carbon energy while delivering peer-leading power supply economics. Being an ESG-principled and practiced company, TeraWulf structures its operations in ways that allow for sustainable bitcoin mining that positively impacts the local community and environment.
Cipher Mining (Market cap: $1.26 billion)
Cipher is an industrial-scale Bitcoin mining company dedicated to expanding and strengthening the Bitcoin network’s critical infrastructure in the United States. Its mission is to provide the vital foundation required for the Bitcoin network to flourish. The company was incorporated in 2020 and is based in New York, New York. Cipher Mining Inc. operates as a subsidiary of Bitfury Holding B.V. Cipher currently has 75,000 deployed mining rigs, according to the company’s June 2024 operational update. It has listed two sites on its website, in Odessa and Alborz, Texas. The 40MW Alborz site was a joint venture in 2022 between Cipher and renewable energy firm WindHQ. The JV received a two-year $46.9 million secured credit facility from crypto lender BlockFi Lending to buy the crypto rigs.
Bitdeer Technologies Group (Market cap: $1.09 billion)
Bitdeer is a world-leading technology company for blockchain and high-performance computing. It handles complex processes involved in computing such as equipment procurement, transport logistics, datacenter design and construction, equipment management, and daily operations. The company also offers advanced cloud capabilities to customers with high demand for artificial intelligence. Headquartered in Singapore, Bitdeer has deployed data centers in the United States, Norway and Bhutan. Recently, in second quarter of 2024, the company reported revenue of $99.2 million, gross profit of $24.4 million, and adjusted EBITDA of $24.9 million, up 5.8 percent, 50.6 percent and 33.2 percent year-over-year, respectively.
Hut 8 Mining (Market cap: $1.08 billion)
Hut 8 Corp. is an energy infrastructure operator and Bitcoin miner with self-mining, hosting, managed services, and traditional data center operations across North America. Headquartered in Miami, Florida, the company’s portfolio comprises 19 sites to make it a leading, vertically integrated operator of large-scale energy infrastructure and one of North America’s largest Bitcoin miners.
Factors impacting miners pre-halving
Here are some factors that impact miners pre-halving:
The price of bitcoin: The price of Bitcoin has a direct impact on how profitable it is to mine Bitcoin. High bitcoin prices can offset the halving event’s lower payouts and maintain the profitability of mining operations. On the other hand, a low price for bitcoin might put pressure on profits and drive some miners—particularly those with more expensive or inefficient equipment—to the verge of bankruptcy.
Costs of operations: The network’s mining difficulty, energy prices, and hardware expenses will all affect how profitable mining is for miners. Profitability based on energy prices can be significantly impacted by regional variations in energy costs. New hardware purchases by miners will lead to more productive mining, which will produce more transactions with less energy used, providing miners a competitive advantage. Further operational difficulties may arise from any changes to the mining difficulty algorithm, which is intended to keep a constant block time of around ten minutes despite fluctuations in the total processing capacity of the bitcoin network, especially when mining rewards are halved.
Pre-halving strategies: Miners can use a variety of strategies ahead of the halving to mitigate the impact of lower payouts. Some would retain bitcoin in an attempt to offset the short-term decline in mining revenue by betting on price gains in the future. To preserve financial stability, others can diversify their businesses, make investments in more energy-efficient mining equipment, or look into alternative revenue streams within the bitcoin ecosystem.
Global bullish Bitcoin views
Globally, there have been many viewpoints as to the future price of Bitcoin. A recent Finder survey on Bitcoin’s price, which included the viewpoints of 31 fintech experts, suggests that Bitcoin could reach the price of $122,000 by the end of 2024. The same survey revealed that Bitcoin price could reach $155,000 by 2025.
Optimism stems from the increase in investments from institutional investors.
The same sentiments are expressed by global asset management firm AllianceBernstein, which believes that Bitcoin’s bullish trajectory will resume after halving.
“We expect Bitcoin’s bullish trajectory to resume post-halving, when the mining hash rates have adjusted and ETF inflows resume back (negative to flat flows last 10 days),” Gautam Chhugani and Mahika Sapra wrote in a note to clients on Wednesday. “Further, integration of spot Bitcoin ETFs with wirehouses, RIAs will continue to provide structural demand for Bitcoin, in our view. We continue to expect Bitcoin to touch a cycle high of $150,000 by 2025.”
Crypto analyst Captain Faibik also forecasts a bullish rally, estimating a surge of 15-20 percent in the coming days. Faibik’s analysis highlights the emergence of an upside breakout within the Falling Wedge pattern, a signal often associated with a reversal of downtrends and indicative of an imminent bullish breakout.
Global bearish Bitcoin views
There are also analysts who are turning bearish. One of them is Markus Thielen, founder of 10X Research, who recently noted: “Our growing concern is that risk assets (stocks and crypto) are teetering on the edge of a significant price correction. The primary trigger is the unexpected and persistent inflation. With the bond market now projecting less than three cuts and 10-year Treasury yields surpassing 4.50 percent, we may have arrived at a crucial tipping point for risk assets.”
He adds: “We sold all our tech stocks last night as the Nasdaq is trading very poorly and reacting to the higher bond yield. We only hold a few high-conviction crypto coins. Overall, we are bearish (stocks + crypto).”
Banking giant Goldman Sachs reiterated that it doesn’t believe Bitcoin belongs in investment portfolios and that its clients are not interested in the cryptocurrency, with gold fan and economist Peter Schiff calling Bitcoin gambling money that has no use in the present or the future.
Even chain data provider Santiment recently found that Bitcoin sentiment has soured following the recent dip. The prevailing ratio of bearish to bullish comments reflects this negativity, suggesting a climate of apprehension among traders.
Economy Middle East wanted to test the Bitcoin waters in the Middle East region and asked crypto exchange executives and investors their views on Bitcoin reaching the 100K mark.
Frequently Asked Questions (FAQs)
How do publicly traded bitcoin mining companies get affected by halving events?
Events that halve the reward for mining new blocks have a direct impact on Bitfarms’ and Marathon Digital Holdings’ earnings. Therefore, in order to sustain profitability in spite of lower incentives, these companies must innovate and optimize their processes.
What plans could mining firms make ahead of the bitcoin halving?
Prominent miners may choose to hedge against the implications of the bitcoin halving by diversifying their businesses, holding bitcoin, or investing in energy-efficient mining equipment. Employing renewable energy sources helps companies like CleanSpark increase profits while reducing expenses.
Why do investors bother about the operational strategy of the leading mining?
The operational strategies of the leading mining firms with the likes of Bit Digital and Iris Energy show how they plan to sustain profitability post-halving. This detail is essential is for investors evaluating the long-term viability of these companies.
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