Recently, Peter Bradt, the CEO of Factir LLC, said that he doesn’t advise buying the Bitcoin dip. The sacred rule that Peter holds is to “Never add to a losing trade.” But I guess this didn’t have any effect on companies that are working with Bitcoin. This is because Bitfarms buys the Bitcoin dip as the market holds below $43k. The company did this to make some profits as the mining hardware costs still remain high and profits decline.
Mining when markets are down
Bitcoin mining is an extremely profitable business with the right equipment and cheap renewable energy. But when the price of Bitcoin falls, the profitability also drops. This is the reason that why mining companies often hold on to their coins to maximize profits in such situations. Bitfarms has also been doing the same by constantly building up its treasury holdings and now has over 4,300 Bitcoins. The recent purchase was worth over $43.2 million and added 1,000 Bitcoins.
As the halving of Bitcoin nears, I think mining companies would want to make sure they stash as many Bitcoins as possible. This is because after the same, the rewards of Bitcoin mining will be cut down, and even though the profits might stay similar, the actual holdings will reduce.
Bitfarms was founded in 2017 and is a blockchain infrastructure company that does Bitcoin mining. It has also gone public in June 2021 and now trades in the US and Canada. At present, it has over 5 industrial-scale Bitcoin mining setups in Quebec, and one is also present in the Washington state. The company accumulates Bitcoins that it mines and also invests back in hardware to make the mining operations even larger. And whatever it does looks at the future and the benefit of its investors.
The latest dip was also bought in the sense to increase profits and make the most of the opportunity. The company is currently doing really well and plans to reach a hash rate of 8 exahash/second by the end of 2022.
What are your thoughts as Bitfarms buys the Bitcoin dip? And do you think it was a good decision or they should have taken Peter Brandt’s advice? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.