Gary A. Vecchiarelli, Chief Financial Officer ( CFO ) of Bitcoin (BTC) mining company CleanSpark, explained on December 17 that the company prefers to allocate resources to increase its mining capacity, rather than to buy BTC above $100,000.
According to executive Vecchiarelli, the company sees accessing BTC as a more attractive option by “investing in our ability to mine it for a production price below $40,000.”
At the beginning of November 2024, CleanSpark was one of the mining companies with the lowest average production cost, with a figure of almost $34,000 per BTC.
CleanSpark sets a different strategy from its competitors
The statement by the CleanSpark (CLSK) executive comes after the company closed an offering of convertible notes for a total of $650 million on December 17.
When the US company announced the issuance of this instrument to obtain capital from investors, it did not specify whether it would use the money raised to buy BTC, as other industry giants have done.
Such is the case of Marathon Digital Holdings (MARA) and Riot Platforms (RIOT). These miners, following the path of MicroStrategy and while continuing their BTC extractions, employed the use of convertible bonds to obtain liquidity, buy bitcoin and add it to their reserves, hoping that the price of bitcoin would rise and that would value their holdings .
CleanSpark CEO and President Zach Bradford explained that they prefer to invest in increasing the company's mining capacity, rather than directly acquiring bitcoin on the market.
“We believe miners are still being valued more on their market cap for what they produce, rather than just the bitcoin they hold.”
Zach Bradford, CEO and President of CleanSpark.
At the time of this article, CleanSpark holds a reserve of nearly 9,300 BTC, equivalent to nearly $980 million, while its market cap is $3.6 billion , making it the 4th largest bitcoin mining company in the world by this measure.
Bradford detailed that “in terms of exahashes, we were roughly at $100 million market cap per exahash by the end of November (2024).”
In that regard, CleanSpark's President noted that the company issued the convertible notes to finance access to greater processing power .
“By the end of November we had a computing power of 33.7 EH/s and this month we expect to reach 37 EH/s. Our next step is to reach 50 EH/s and that is one of the reasons why we are using this capital.”
Zach Bradford, CEO and President of CleanSpark.
MicroStrategy is the publicly traded company with the largest BTC holdings, accumulating 439,000 BTC on its balance sheet. These reserves generate a premium on its market capitalization due to its shareholders’ perception of Bitcoin’s potential.
However, Bradford argues that mining companies do not receive a comparable premium simply for holding bitcoin.
“If you look at Michael Saylor, he has a huge premium built in. In the miners, it’s not nearly the same.”
Zach Bradford, CEO and President of CleanSpark.
CleanSpark's strategy will therefore need to be evaluated going forward, given that currently, based on market cap, MARA and RIOT are above CLSK at $8.3 billion and $4.8 billion, respectively.
