CleanSpark: How to Profit from Bitcoin Halving?
CleanSpark СЕО Zachary Bradford admits that the upcoming Bitcoin halving poses both a significant challenge and an exceptional opportunity for public mining companies. He shares his company's strategy designed to navigate these upcoming trials successfully.
As of January 2024, CleanSpark has demonstrated notable market resilience in crypto mining. The company has mined nearly 7,400 bitcoins, witnessing a $37 million increase in annual revenue compared to 2022, totaling $168 million.
Bradford speaks about the impact of newly launched spot Bitcoin ETFs, suggesting they generate a steady demand for BTC, advantageous for mining operations. The introduction of Bitcoin ETFs is seen as a strategic approach by the traditional finance sector to gradually penetrate the crypto market, aiming to mitigate abrupt price volatility.
He strongly believes in Bitcoin's price potential, foreseeing up to a 100% increase “on a very long-term thesis.”
Bradford highlights the importance of a pragmatic Bitcoin management strategy. For example, CleanSpark is set to launch an in-house trading division focused on maximizing returns from the company's 3,000 bitcoins. This division will operate independently, without reliance on external clients or other products.
We would have traders that work for our company and they would then trade that Bitcoin to generate a little bit of yield based on the volatility of Bitcoin,says Bradford.
However, he acknowledges the imminent challenges of the Bitcoin halving for miners. “If you measure revenue in Bitcoin, it would be cut in half in a single day. However, when measured in dollars, which is what we report as public companies, we believe Bitcoin's value will go up, and revenues will recover quickly over time,” Bradford notes.
He also anticipates that mining might become economically unfeasible for some companies. Bradford estimates that 15% to 30% of miners might face operational difficulties, presenting CleanSpark with new opportunities in M&A. “There's great opportunity in M&A, especially in facilities or data centers. If there's a data center with old equipment, no longer efficient, we'd love to buy the facility,” he states.
Furthermore, Bradford foresees a consolidation phase in the mining sector, favoring larger conglomerates over individual firms, in line with his belief that most market players will eventually have to withdraw.
I'm a big believer that in the next 4 years, there will be only three to four winners in the space. As miners get bigger, the flight to quality will be more important,Bradford concludes.