Mining company Cathedra Bitcoin transforms into a data center, following MicroStrategy in dollar-cost averaging Bitcoin.

Claiming that the Bitcoin mining business has become increasingly unpredictable, Cathedra Bitcoin announced a gradual exit from Bitcoin mining operations and a shift towards developing data center services, using business revenues to purchase Bitcoin on the open market. Following Marathon Digital, this is the second mining company to announce plans to adopt the MicroStrategy strategy in the future.

Many companies are rushing to use Bitcoin as a reserve asset. Is it a focus on their core business or a revival through borrowing the corpse?

Mining Profit Unstable, Cathedra Shifts to Data Centers

Cathedra Bitcoin's statement pointed out that the fluctuation in mining profits over the past three years has made mining no longer a reliable way to accumulate Bitcoin, especially with events like Bitcoin halving intensifying mining competition and gradually decreasing profits.

Cathedra emphasized that the company's main goal is to accumulate Bitcoin for shareholders, and that mining is no longer able to achieve this goal. Therefore, they have decided to shift towards operating data centers to use the stable cash flow from this business to purchase Bitcoin.

MicroStrategy Effect: Measuring Bitcoin per Share

According to previous reports, MicroStrategy founder Michael Saylor was the first to promote the strategy of publicly traded companies purchasing Bitcoin on the open market, which inspired mining companies like Marathon Digital to follow suit, sparking discussions about their core operations.

Cathedra pointed out that many publicly traded Bitcoin mining companies now hold fewer Bitcoins per share than three years ago, while companies like MicroStrategy have gained favor from stock market investors by continuously increasing the amount of Bitcoin per share.

It emphasized:

By transitioning to data center operations and using the revenue from this business to purchase Bitcoin on the open market, the company can effectively enhance the growth of Bitcoin per share.

Mining Companies Expand Business to Combat Selling Pressure

With the Bitcoin network's hash rate reaching a historic high, miners' daily profits have significantly decreased. JPMorgan recently pointed out that due to a five-month continuous increase in overall hash rate returning to pre-halving levels, miners' profitability is at an all-time low.

In a high-pressure competitive environment, many mining companies are facing selling pressure. Companies like Core Scientific and Applied Digital, which announced expansions into high-performance computing (HPC) and AI hash power hosting services, have gained investor favor.

Cathedra Plans to Issue Debt to Increase Bitcoin Holdings

In addition to data center operations, Cathedra also plans to raise funds through equity and Bitcoin derivatives to further increase its Bitcoin holdings. They will also continue to retain existing mining equipment and output, but will focus primarily on the more predictable data center business, while continuously exploring new sources of funding for growth.

Cathedra believes that through transitioning to data center operations, the company will be able to achieve stable cash flow and continue to increase its Bitcoin holdings using the resources mentioned above, creating more value for shareholders.