As June monthly production updates roll out over the next week, Core Scientific and Bitfarms have both sold nearly 50% or more of their bitcoin treasuries.
Made a bunch of money in the public miner space; lost a bunch too; ready to do it all over again ...a lot of brainpower has been devoted to this sector recently but the TLDR is this: RIOT is the best buy at the moment with no debt and state of the art immersion cooling facilities. CORZ number 2 despite Feinstein sh$tting the bed with this bitcoin dump (and that float is just nasty/ former spac status is haunting it to this day). MARA on the other hand is busy committing harakiri with a grand total of JACK SHIT mined in the last 25 days so you can just skip over that one for now. if its dust collector rigs get bought up by another miner at a discount or they get into some underwhelming get-me-the-fuck-out-of-here type merger/buy-out I wont be surprised...all imho
play this sector only if you understand that miners outperform bitcoin on the upside but get ssssssmoked on the downside
Been looking more closely at the miners this past month. Agree RIOT looks relatively best positioned of the bigger names, but they still have a lot of machine orders remaining in back half of this year. Positive is that their newer facility is ready to go in getting these miners online, but still sizable cash outlays for them. Thought the recent Jaran Mellerud piece had a good lay of the land in balance sheet strength, cash flow outlooks and machine orders / financing for rest of year. Had a positive take on Argo… ‘strong balance sheet with little debt and strong operating cash flows relative to upcoming machine payments. Argo also has the second-lowest direct bitcoin production cost in the industry.’ Working to replicate some of the numbers, and understand more around their lower cost energy sourcing (i.e. sustainability of that). I think it’s still too early to get involved right now given general overhang and backdrop presented by Sam and Dylan, but agree that there will be an attractive time for this space again.
I like a lot of the smaller canadian miners too but my idea was that bigger, more established, better capitalized ones should fare better if the bear market is longer than my base case so ive focused on the top dogs only.
Id love to see regular posts on the public miners here; im sure others would too
Was considering that too… if bigger is better given greater access to capital in this environment and ability to take advantage of dislocation. Challenge with that though seems to be that those same bigger players had the most access to capital on the upswing and did purchasing / financing on steroids that is now causing them the greater stress. If most of these companies were signing on for double digit interest rates to NYDIG, Galaxy, etc when BTC was much higher (super attractive margins being modeled) and rates across most markets were much lower… can’t imagine debt financing being as available today, yet alone what the pricing would look like. And issuing equity - not great to existing shareholders.
Bigger names have LEAPs though - which could be really interesting at some point if there is greater confidence in downside having played out… and if implied volatility levels come down from current levels. Define your potential downside, give yourself a lot of time to have things turn, etc.
Thanks Sam. Agree with wolfiecaps, would appreciate that as well. Their investor relations sites leave a lot to be desired - so much emphasis on hash rate growth, BTC mined, etc… vs being able to make it through to the other side in this environment and benefit from over-exuberance of other players. Feel like it’s the epitome of an area in public equity markets that could be left for dead and overextend to the downside given negative headlines and intermediate term challenges. Also have all the names under $1B market cap now, so likely little institutional ownership / analyst research coverage, further reinforcing opportunity to add value if taking a longer term view reinforced by financials. Even the difference in approach on some being vertically integrated (arguably controlling destiny more on energy cost / getting miners online) vs others (like a MARA) trying to locate hosting and having machines sit idle… feel like there is a lot of opportunity to distinguish between good / bad.
Im always paring back and adding with some of these and bitcoin/miners are just one part of my focus but the view is long term focused; well aware we can see 15k, 10k bitcoin which would leave these names even more wrecked. I have stink bids for both bitcoin and miners but then again so does every one and their grandmother, everyone has got the bear market figured out and is expecting more doom and trying to time the bottom. Good luck with that.... i have contrarian instincts and i like to follow data and with commodities falling, especially crude, it makes me think a CPI rollover is imminent which pulls a fed pivot forward. And so i wont be surprised if risk has bottomed already, including bitcoin. Well see what happens.
Made a bunch of money in the public miner space; lost a bunch too; ready to do it all over again ...a lot of brainpower has been devoted to this sector recently but the TLDR is this: RIOT is the best buy at the moment with no debt and state of the art immersion cooling facilities. CORZ number 2 despite Feinstein sh$tting the bed with this bitcoin dump (and that float is just nasty/ former spac status is haunting it to this day). MARA on the other hand is busy committing harakiri with a grand total of JACK SHIT mined in the last 25 days so you can just skip over that one for now. if its dust collector rigs get bought up by another miner at a discount or they get into some underwhelming get-me-the-fuck-out-of-here type merger/buy-out I wont be surprised...all imho
play this sector only if you understand that miners outperform bitcoin on the upside but get ssssssmoked on the downside
Been looking more closely at the miners this past month. Agree RIOT looks relatively best positioned of the bigger names, but they still have a lot of machine orders remaining in back half of this year. Positive is that their newer facility is ready to go in getting these miners online, but still sizable cash outlays for them. Thought the recent Jaran Mellerud piece had a good lay of the land in balance sheet strength, cash flow outlooks and machine orders / financing for rest of year. Had a positive take on Argo… ‘strong balance sheet with little debt and strong operating cash flows relative to upcoming machine payments. Argo also has the second-lowest direct bitcoin production cost in the industry.’ Working to replicate some of the numbers, and understand more around their lower cost energy sourcing (i.e. sustainability of that). I think it’s still too early to get involved right now given general overhang and backdrop presented by Sam and Dylan, but agree that there will be an attractive time for this space again.
Jaran put out a great piece. We can replicate some of that analysis and dig deeper across miners if that's of interest.
would definitely appreciate that;
I like a lot of the smaller canadian miners too but my idea was that bigger, more established, better capitalized ones should fare better if the bear market is longer than my base case so ive focused on the top dogs only.
Id love to see regular posts on the public miners here; im sure others would too
Was considering that too… if bigger is better given greater access to capital in this environment and ability to take advantage of dislocation. Challenge with that though seems to be that those same bigger players had the most access to capital on the upswing and did purchasing / financing on steroids that is now causing them the greater stress. If most of these companies were signing on for double digit interest rates to NYDIG, Galaxy, etc when BTC was much higher (super attractive margins being modeled) and rates across most markets were much lower… can’t imagine debt financing being as available today, yet alone what the pricing would look like. And issuing equity - not great to existing shareholders.
Bigger names have LEAPs though - which could be really interesting at some point if there is greater confidence in downside having played out… and if implied volatility levels come down from current levels. Define your potential downside, give yourself a lot of time to have things turn, etc.
Thanks Sam. Agree with wolfiecaps, would appreciate that as well. Their investor relations sites leave a lot to be desired - so much emphasis on hash rate growth, BTC mined, etc… vs being able to make it through to the other side in this environment and benefit from over-exuberance of other players. Feel like it’s the epitome of an area in public equity markets that could be left for dead and overextend to the downside given negative headlines and intermediate term challenges. Also have all the names under $1B market cap now, so likely little institutional ownership / analyst research coverage, further reinforcing opportunity to add value if taking a longer term view reinforced by financials. Even the difference in approach on some being vertically integrated (arguably controlling destiny more on energy cost / getting miners online) vs others (like a MARA) trying to locate hosting and having machines sit idle… feel like there is a lot of opportunity to distinguish between good / bad.
Im always paring back and adding with some of these and bitcoin/miners are just one part of my focus but the view is long term focused; well aware we can see 15k, 10k bitcoin which would leave these names even more wrecked. I have stink bids for both bitcoin and miners but then again so does every one and their grandmother, everyone has got the bear market figured out and is expecting more doom and trying to time the bottom. Good luck with that.... i have contrarian instincts and i like to follow data and with commodities falling, especially crude, it makes me think a CPI rollover is imminent which pulls a fed pivot forward. And so i wont be surprised if risk has bottomed already, including bitcoin. Well see what happens.