Cathedra Bitcoin Shifts Focus from Mining to Bitcoin Acquisition Strategy
After seven years in the mining business, Canadian Bitcoin miner Cathedra Bitcoin (CBIT) is altering its focus. The company is now shifting to developing data centers and plans to use the profits to purchase bitcoin instead of mining it.
- The publicly traded company cited unpredictable profit margins as the main cause behind the change in strategy:
"The last three years have demonstrated to us that Bitcoin mining is not a reliable way to grow shareholders’ bitcoin per share. Indeed, nine of the ten largest (by market capitalization) publicly listed Bitcoin mining companies hold less bitcoin per share today than they did three years ago," the company stated in the memo, adding that companies like MicroStrategy, which focus on increasing bitcoin per share, have been rewarded by equity markets.
- Cathedra plans to shift towards developing data centers to generate predictable cash flows for purchasing more bitcoin. Other tactics may include borrowing against balance sheet assets, using bitcoin-linked derivatives to generate income, developing new assets from proceeds of financings, and issuing debt and hybrid securities for acquiring more BTC.
- The company will also continue its existing mining operations and retain the bitcoin it produces, indicating that mining will not be completely abandoned.
"Going forward, we will make all capital allocation decisions with the intention of maximizing our shareholders’ per-share bitcoin holdings. This is a philosophy we have always held in our minds, now formalized as our explicit policy and primary objective in stewarding shareholder capital," reads the memo.
- Cathedra currently holds 43 BTC, or 5 sats per share. "We look forward to reporting our progress to shareholders over the coming quarters and years," was stated in the announcement.
Read more about the rationale behind the 'sats per share' metric for valuing public companies in a recent issue of Marty's Bent.
