As the Bitcoin network hash rate continues to increase, the dynamics of the mining industry and the types of participants are more diverse than ever. Of course, most bitcoin investors are familiar with self-mining giants, multi-billion dollar market cap giants like Riot Blockchain, and rumors of historic partnerships between energy giants like ExxonMobil and off-grid bitcoin miners. But unlike these typical and somewhat expected corporate actors, the mining industry has seen a large growth of somewhat anomalous entities to explore mining and launch pilot projects of various sizes to gain exposure to mining.
From global shipping companies to health and wellness brands to crypto-lending companies, mining is infiltrating the business strategies of a growing number of unexpected entities. This article reviews some of the lesser known and unexpected companies that are exploring bitcoin mining.
Health and Wellness Brands
Given the popularity of meat-eating and oil-free diets in some Bitcoin investor circles, the news that a health and wellness brand has announced a mining venture may not be the biggest surprise. In June 2021, Florida-based Graystone Company, a self-described health, longevity, and anti-aging company, announced its plans to grow a bitcoin mining venture launched a month earlier. In late September 2021, the company published an update announcing that its operations have mined approximately 0.1 BTC since its launch, with more than 2,000 TH/s of hashes currently in operation and planning for a few thousand more online over the coming months. In January, Graystone said they were running a total of 50 Antminer S19j Pro devices — not bad for a wellness company.
Cryptocurrency Lenders
When someone thinks of bitcoin mining companies, lending companies are probably not the first business that comes to mind. But two of the biggest lenders in the cryptocurrency industry are actively involved with plans to expand.
In May 2021, BlockFi announced its new mining efforts in the form of a partnership with Blockstream’s mining unit. It was not disclosed how much hashrate BlockFi is managing through Blockstream, but the lender said it considers mining to complement its financial services offering.
Celsius is also investing heavily in bitcoin mining, with $500 million spent on mining efforts as of November 2021. In an interview, Celsius CEO Alex Mashinsky said his company operates 22,000 miners, most of which are Antminer S19 models. Like BlockFi, Mashinsky described his company’s mining efforts as a strategic complement to its lending business.
shipping logistics companies
Shipping companies do not usually mine bitcoin, but in February 2021, a self-described global shipping and logistics integrated solutions provider jumped into the bitcoin mining arena. New York-based Sino-Global Shipping announced a new executive leadership team just over a year ago to lead its bitcoin mining expansion efforts while focusing on their core business. (So, a kind of corporate strategy like MicroStrategy’s famous Bitcoin buy-to-go campaign, but for mining…) The announcement sent Sino-Global’s stock price up 130%. Since the original announcement, the company has purchased a few thousand miners, entered into a joint venture to manufacture new miners, and even accepted bitcoin as payment for its core services.
asset management companies
Some of the world’s largest investment banking firms are major contributors to the leading bitcoin miners in the public market. But how many investment banks and wealth management companies are mining bitcoin themselves? At least one: Horizon Kinetics. The New York-based investment management firm started its first bitcoin mining unit in 2017, and launched a second mining initiative in 2018. The company reportedly manages nearly $7 billion in assets, and they point to why mining is exploring mining as a way to better understand Bitcoin. Itself. Horizon’s mining growth strategy largely involved purchasing several thousand miners and negotiating hosting contracts for its hardware.
Electric utility companies
The fact that a multi-billion dollar electric utility company has a subsidiary running a bitcoin mining pilot program may not be the most surprising development in the mining industry, given the fundamental niche that mining occupies in the energy markets for the foreseeable future. But given that bitcoin mining as an industry is only a decade old, the Hungarian subsidiary of E.ON is a pioneer in its own industry. Hungary’s subsidiary E.ON has partnered with another Hungary-based company, Enerhash, to install a small mining operation at one of its plants to test its ability to improve the economics and performance of the plant in various ways. What makes this partnership even more intriguing is how few media outlets have discussed it. The lack of interest in mining activity in E.ON Hungary may have been due in part to the fact that some of their press releases about the operation were written in Hungarian while most of the mining news last year focused on North and Latin America.
small technology companies
It is important to note that not every company advertises new mining projects or legitimate pilot projects. Joining the excitement and hype around bitcoin mining, many of these companies — usually publicly traded technology companies with small market capitalization — are relying on desperate ploys to boost their stock prices. Publishing a press release about bitcoin mining is easy. Building a sustainable mining operation is much more difficult.
Therefore, in the case of many small companies making similar announcements, it can be difficult to determine which explorations are legitimate and which are not. But at the risk of the company mentioned in this paragraph being heavily overwhelmed by this context, one example of a smaller technology company that appears to be really mining is Jasmine Technology. The publicly traded telecommunications company, based in Thailand, revealed its plans to start bitcoin mining in December 2021, which led to a staggering 6700% rise in its share price. At the time of the announcement, Jasmine Technology reportedly operated 325 miners and mined 8 BTC.
Should everyone mine bitcoin?
Exposure to mining, directly or indirectly, is likely to be very beneficial both financially and strategically for many investors and businesses. Seeing so many different types of participants entering the mining market is fascinating, from this author’s point of view. Although many companies are working to make products and services available so that practically everyone can mine Bitcoin, this does not mean that everyone should start mining right away. Every new miner needs a good strategy and a slow and thoughtful start to their operations. Bitcoin’s hash rate growth is lined up with hundreds of failed miners who plan poorly. A successful mining process always begins slowly and carefully. Reckless and random starts never last.
Conclusion
Although energy giants and multi-billion dollar self-mining companies dominate the corporate mining landscape today, an increasing number of atypical companies are incorporating bitcoin mining. The widespread interest from these entities has some downsides, although bitcoin mining is a relatively nascent and risky industry. How many of these processes will last for more than one Bitcoin market cycle is an open question. But instead of just buying bitcoin, the companies that want to mine it are also a special class of bulls in their own league.
This is a guest post by Zack Voell. The opinions expressed are their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.