According to Bloomberg, since February 2023, 13 of the top mining companies have placed orders for over $1 billion worth of specialized computers to increase efficiency for their operations and lock in favorable electricity rates. The surge in activity is sparked by a near-death recovery in the price of Bitcoin, which reached a record high of more than $70,000 on March 8. The rising price allows most miners to remain profitable, driving them to consume energy at a record pace. Last month, miners drew a record 19.6 gigawatts of power, up from 12.1 gigawatts the same period in 2023, according to an estimate by Coin Metrics.
Bitcoin miners were some of the best performing stocks last year, allowing the companies to raise capital by selling newly issued shares through “at-the-market” offering programs. Shares of Marathon and CleanSpark have risen by almost 600% and 900%, respectively, since December 2022. The most efficient miners will benefit the most as the increase in Bitcoin price will push even more profits to the bottom line. However, the rapid expansion comes with risks, as seen in the last crypto bull run in late 2021, when a flurry of mining companies went public and raised billions of dollars from the equity and debt markets. Companies borrowed a record amount of money and when the market crashed in 2022, so did miners.
