VanEck’s Nathan Frankovitz and Matthew Sigel said if miners don’t keep investing in the latest machines, the share of the global hashrate deteriorates, resulting in reduced Bitcoin rewards.
Debt among Bitcoin miners has increased from $2.1 billion to $12.7 billion in just 12 months as they race to meet demands for artificial intelligence and Bitcoin production, according to investment giant VanEck.
Without continued investment in the latest machines, a miner’s share of the global hashrate deteriorates, resulting in a reduced share of the daily awarded Bitcoin (BTC), VanEck analyst Nathan Frankovitz and head of digital assets research, Matthew Sigel, said on Wednesday in their October Bitcoin ChainCheck report.
“This stems from the fact that miners’ revenues are difficult to underwrite as they rely almost entirely on the price of Bitcoin, which is speculative. Importantly, equity tends to be a more expensive form of capital than debt,” Frankovitz and Sigel added.
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