$BTC • S19 XP: $12 → $125 (939%)
• M66s: $66 → $331 (398%)
• S21: $63 → $224 (252%)
• S21 Pro: $108 → $296 (173%)
At Blockware, we call this phenomenon the ‘Mining Profit Multiple.’ Because many Bitcoin miners operate with a fixed energy cost, revenue growth causes non-linear growth in net profit margins. This positions miners for outsized benefits when the Bitcoin price rises
ASIC prices - specifically the latest generation machines - have seen their prices move in tandem with the Bitcoin price during previous bull markets. During the last cycle, the Antminer S19 began trading at ~$24/T in early 2020.
By the top of the bull market in 2021, S19s were trading for more than $120/T. So during a time in which miners were seeing their profit margins increase exponentially, the value of their hardware was also keeping pace with the rising Bitcoin price.
Getting exposure to Bitcoin mining #minning
A balanced portfolio of BTC-denominated assets likely has a combination of spot Bitcoin, Bitcoin mining stocks, other BTC-exposed equities — such as MSTR and COIN — and ASICs.
When it comes to getting exposure to Bitcoin mining, owning an ASIC has a few notable advantages:
• Better fleet efficiency: When you control your own fleet of ASIC miners, you can ensure higher operational efficiency compared to public mining companies, which may have diverse priorities that affect overall productivity. The blended average efficiency for the best-of-the-best public mining companies is in the 20 to 25 W/T range. The latest Bitmain ASIC, the S21 Pro, has an efficiency of 15 W/T.
• No executive compensation packages or equity dilution: Publicly traded mining companies are notorious for diluting their shares in pursuit of growth - with shareholders rarely benefiting from the growth in the form of dividends. Moreover, these public equities have significant overhead costs tied to executive compensation and stock options. When you mine Bitcoin yourself, these risk factors are eliminated, enabling you to capture more of the mining upside.
