Bitcoin Miners’ Stock Market Lifeline Becomes Irritant to Shareholders

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The equity lifeline used by many Bitcoin miners to help weather the most recent crypto winter is beginning to irk some shareholders.

The 12 major publicly-traded miners, including Marathon Digital Holdings Inc. and Riot Platforms Inc., raised about $440 million through stock sales in the second quarter, a jump of almost 60% from the previous three months, according to data complied by TheMinerMag. The companies have raised over $4.9 billion since the start of 2021.

Bitcoin mining is an energy-intensive process in which firms use expensive specialized computers to validate records of transactions on the blockchain and earn rewards in the form of the token. This is done by thousands of the computers, or Bitcoin mining rigs, stacked on top of each other in data centers that use high amounts of electricity.

The issue can be a turnoff for investors that put more focus on cash flow and the return on invested capital. “I actually don’t see this as much of an issue,” said Steven McClurg, chief investment officer at Valkyrie Investments, which has a crypto-mining equity ETF. “A lot of companies make the mistake of issuing debt when debt is expensive, they are afraid of diluting shareholders because of the short-term consequences.”

Terawulf Chief Financial Officer Patrick Fleury told investors that the company will use at-the-market equity offerings cautiously.

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