Bitcoin miner Cathedra is planning to pause its Bitcoin mining operations, switch to another business, and invest realized profits into its Bitcoin acquisition strategy, following MicroStrategy and Marathon Digital’s lead, by regularly purchasing bitcoin (BTC) from the open market.
The company decided on this move to recover from the effects of the 2024 Bitcoin halving event, which reduced mining block rewards. The miner also wants to retain its position in the industry while increasing shareholder bitcoin per share.
Cathedra Pulls the Plug on Mining
According to Cathedra’s last press release, the primary reason behind its pause on bitcoin mining is its inability to meet its most important performance metric and objective, which is acquiring bitcoin for its investors.
“The last three years have demonstrated to us that bitcoin mining is not a reliable way to grow shareholders’ bitcoin per share,” the miner noted.
As noted by Cathedra, nine out of ten publicly listed Bitcoin mining companies have lost more bitcoins than they gained within the past three years, holding less bitcoin per share than they used to. Citing the just concluded 2024 bitcoin halving event as the reason for shares reduction.
In contrast, other listed companies like MicroStrategy and Marathon have successfully increased their shareholders’ bitcoin per share by acquiring crypto from the open market rather than from mining.
Cathedra Switches to Data Center Development
Cathedra plans to reposition the company away from the bitcoin mining business toward data center development and operation, which it believes will generate attractive returns on the company’s capital. It has merged with Kungsleden’s data center development to achieve its goal.
Since Cathedra’s primary objective is to generate growth in shareholders’ bitcoin holdings, it will still retain the bitcoin produced by its existing mining operations.
In addition, the miner will regularly acquire bitcoin through market purchases using the income generated from its data hosting operations. It also plans to borrow against the balance sheet assets to buy bitcoins and generate income via bitcoin-linked derivatives.
MicroStrategy, Marathon Fuel Institutional Bitcoin Investment
Microstrategy became the first public company to own bitcoin with its initial purchase in 2020. Michael Saylor, sitting as the company’s chairman, has bolstered its bitcoin acquisition scheme. With its last purchase in Q3 2024, MicroStrategy holds 244,800 BTC.
Similarly, famous Bitcoin miner Marathon Digital has purchased bitcoin from the open market, not relying only on its mining reward to increase its bitcoin stash. Recently, it bought 4,144 BTC for $249 million to raise its holdings above 25,000.
