JPMorgan: Miners Follow MicroStrategy’s Bitcoin Acquisition Strategy

Crypto miners are increasingly mirroring the Bitcoin acquisition strategy of MicroStrategy, according to JPMorgan. This shift comes as profitability is pressured by factors such as the recent reward halving and a rising network hashrate.

In a report published on Wednesday, JPMorgan noted that, like MicroStrategy, miners are focusing on accumulating bitcoin rather than liquidating their reserves. This strategic shift is a direct response to increased competition and mining difficulty, both triggered by the April halving event and the expanding network hashrate.

To combat these challenges, miners are not only hoarding bitcoin but are also diversifying into areas like artificial intelligence and high-performance computing (AI/HPC). According to JPMorgan analysts, led by Nikolaos Panigirtzoglou, this move helps them weather the pressure on their bottom line.

Among the key players adopting this model is Marathon Digital Holdings (MARA), which now holds 35,000 bitcoins, worth around $3.5 billion. This makes it the second-largest publicly traded holder of Bitcoin after MicroStrategy.

Source: X

Miners are not the only entities getting into bitcoin accumulation. Semler Scientific, a medical device manufacturer, has also jumped on the bandwagon, acquiring $144 million in bitcoin.

Source: X

One of the key drivers of this shift is the introduction of U.S. spot bitcoin ETFs in January, which offer institutional investors an easier way to gain exposure to bitcoin directly, rather than through mining company shares. This has led to underperformance in the shares of mining companies, which were previously seen as a proxy for bitcoin.

To fund operations, miners are increasingly relying on debt and equity offerings rather than selling their Bitcoin holdings. In fact, miners have raised more than $10 billion in equity so far this year, surpassing the previous record of $9.5 billion set in 2021.