CleanSpark Has The Only Path Forward As A Bitcoin Miner
Meet The Best Strategically-Built Crypto Miner
It's 2035, all mining companies have stopped mining Bitcoin and are now receiving revenue from transaction fees instead of receiving revenue through Bitcoin rewards. These mining companies have been holding and accumulating a stockpile of Bitcoin on their balance sheet for over a decade. Maybe their stockpile of Bitcoin has tripled in value to an amount equal to 10s of billions of dollars. But, what's next?
Currently, we're seeing the same cycle from pure-play Bitcoin miners. Purchase new miners, take the revenue from the Bitcoin rewards and use it to buy more miners, add to the stockpile of Bitcoin on the balance sheet, and the cycle repeats itself over and over again. I was shocked listening to the "Crypto Mining: Technology, Flexibilty, and Sustainability Panel." The panel discussion consisted of representatives from some of the most renowned public Bitcoin mining companies, including Marathon Digital Holdings, Riot Blockchain, HIVE Blockchain Technologies, Hut 8 Mining, and several others.
About 30 minutes into the discussion, the panel found themselves debating what the long-term outlook of their companies looked like. Under the assumption each company had billions of dollars worth of Bitcoin on their balance sheet and was no longer mining Bitcoin, representatives from these companies seemed lost. Some panelists discussed starting an entirely new business from their Bitcoin profits, while others discussed becoming a 'Bitcoin bank' raking in fees from lending their Bitcoin out. As an investor, this was shocking to me. These multibillion dollar companies had seemingly no idea of what they were going to do after they no longer mined Bitcoin.
This sent several thoughts shooting through my head: certainly no serious investor would be investing in a company that has no long-term plan for their company, right? If that's the case, how do some of these companies have billion dollar valuations? Does this mean we are in a bubble? Should everyone steer clear of investing in these companies?
The discussion continued, representatives of the multibillion dollar companies still seemed lost while debating what the best move for the future would be for each company. But then, seemingly like a dark horse, Zachary Bradford (CEO of CleanSpark) provided his thoughts on the issue. Instead of being clueless as to what his company would look like 15 years down the road, he explained how his company was actively investing their profits from Bitcoin mining into other existing business segments. Instead of contemplating starting an entirely new company from the profits, he explained how his business was diversified. Instead of concerning himself with the profits down the road, he concerned himself with what the profits meant currently.
Then all of a sudden it hit me. While investing in a pureplay miner currently seems like the better investment, a pureplay miner doesn't know what its future holds even 10-15 years down the road. These pureplay miners likely won't be around in 10-15 years if they don't figure out where their long-term business model lies. CleanSpark has it figured out. CleanSpark is actively reinvesting Bitcoin revenues into its other existing business segments. The other business segments revolve around renewable energy and microgrids, something that will be in demand seemingly for hundreds of years to come. CleanSpark is actively building a renewable energy behemoth with its Bitcoin profits, while still playing the same game of holding Bitcoin on their balance sheet.
The pureplay Bitcoin miners want to be seen by everybody, they want to be heard. This was seen in the panel discussion. Representatives from Marathon Digital Holdings, Bitfarms, and Hive Blockchain stole the show. The panelists that had diversified businesses and a long-term strategy were spoken over, and were hiding in plain sight. These consisted of CleanSpark, Foundry, and DMG. Then I started wondering, why is this?
My honest belief is that the pureplay Bitcoin miners don't care about shareholders, they don't care about their long-term business model, they don't care about the environment. All they care about is personally profiting at the expense of shareholders. That's it, it's blunt. But think about it, why else would a company with seemingly no plans for its long-term business model want to talk over other panelists and steal the show at an investor presentation? Lacking a long-term business plan should be embarrassing, but they know they can capture the moment of the Bitcoin craze and take advantage of short-minded retail shareholders.
We see this time and again. It's hiding in plain sight. Why else would Merrick Okamoto (CEO of Marathon Digital Holdings) choose to dilute shareholders with public offerings and sell his shares of the company? Is it because he knows his business doesn't have a long-term plan? Is it because his only concern is profiting in the short-term? If you truly believe in your business model long-term, and believe in the future of what your company does -- you don't sell your shares.
I've singled out Marathon Digital Holdings in particular, but this is seen across the spectrum of pureplay mining companies. We see it at HIVE Blockchain and Bitfarms. The companies with long-run plans aren't selling their shares in their companies. They're not continuously diluting shareholders into paying for something that might not be around in 10-15 years. They're focused on building out other business segments, albeit quietly, in order to become gigantic companies in the future.
So, although pureplay mining companies have favor from investors currently, these companies won't be around in 10-15 years if they don't get their business model straightened out. It's a concerning feeling knowing that multibillion dollar companies can get away with a lack of a long-term business plan. The companies that are 'in the dark' and quiet about what they're doing will be the Amazon of tomorrow -- not these shell companies that short-minded investors are being sucked in to.
*I have never been offered, and never will accept compensation from a company for spotlighting their business and stock. These are my own thoughts, opinions, and ideas. This article should not be interpreted as financial advice.