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Tom Kool

Tom Kool

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations

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A Green Way to Play 2024’s Bitcoin Boom

Bitcoin

Before the bitcoin halving, many experts were forecasting disaster for the cryptocurrency.

JPMorgan projected prices would drop to $42,000, saying the market was overbought.

Others said any potential gains post-halving were already priced in.

Regardless of where you stood before the halving took place in April, bitcoin is still here and it’s going strong.

However, one sector of the crypto markets has undergone a profound shift in the weeks since.

With bitcoin mining rewards getting cut in half, many who were previously profitable could now face bankruptcy or financial uncertainty.

That’s left the door open for smart mining companies to take advantage of the shakeout, and those on stable footing could come out even stronger than before.

That’s why the focus has now turned to efficient miners like Gryphon Digital Mining (NASDAQ: GRYP)

We’ve already started to see some consolidation in the market, with public companies leveraging their ability to raise capital to buy out smaller, struggling miners.

As a result, we believe that Gryphon stands to benefit as we approach a crossroads for the bitcoin mining industry.

The Winners and Losers of the Halving

Gryphon’s CEO Rob Chang said he’s seen even the biggest mining companies face challenges in recent years when crypto markets face pivotal moments.

For public companies whose costs average — $54,000 per bitcoin — that’s acceptable for business when bitcoin trades at $60,000. 

You can quickly find yourself in hot water though when bitcoin drops below $50,000, as it did for much of the last few years.

Gryphon, on the other hand, has remained gross profit-positive every single month they’ve been in operation, and expects an extrapolated all-in cost of only $44,989 per bitcoin post-halving.

That comes in large part because they’ve taken an asset-light approach.

Over the last year, Gryphon has managed to mine roughly $21 million worth of bitcoin with only three employees in the company.

Their decision to prioritize revenue-generating assets like mining machines rather than expensive facilities has dramatically lowered their fixed costs.

As a result, Gryphon been a leader in efficiency, ranking consistently in the top 4 and placing first in efficiency throughout much of the last year.

We believe all of this places Gryphon (NASDAQ: GRYP)on much more stable footing as the rewards for bitcoin miners have put the industry in flux in recent weeks.

From The C-Suite of Bitcoin Mining Giants

Much of their savvy decision-making comes as a result of the wealth of experience on Gryphon’s leadership team.

CEO Rob Chang previously served as CFO for Riot Blockchain, one of the largest publicly traded bitcoin mining companies, and managing director and Head of Metals and Mining at Cantor Fitzgerald.

Gryphon’s Chief Technical Advisor Chris Ensey shares Chang’s vision, having served at Riot as well, as its former CEO and COO.

CFO Sim Salzman came from another top mining company in Marathon Digital, as its market cap rose from $500 million to $8 billion in just 12 months.

With Gryphon’s leadership seeing the rise and fall of many competitors since 2018, their decision to remain asset-light and grow quickly in the bitcoin bull market has given them an important advantage.

Unlocking A Potential $40 Trillion Industry

While Gryphon’s efficiency and world-class team provide a distinct advantage, its clearest advantage comes from an unexpected place for a cryptocurrency company. Despite cryptocurrencies being bashed for environmental concerns and being energy intensive, Gryphon stands apart from their competitors.

Gryphon (NASDAQ: GRYPutilizes 100% renewable energy from a hydro-powered facility in upstate New York.

Chang noted that, for those investing in mining companies, some see the Company’s ESG focus as a bonus. 

Others, however, view it as a requirement, noting the vast number of institutional investors that can only invest in companies that meet these ESG benchmarks.

With the global ESG market expected to reach $40 trillion by 2030, according to Bloomberg, that may open a lot of doors unavailable to other bitcoin miners.

If institutions want to add exposure to bitcoin mining to their ESG funds, for instance, Gryphon is one of only a few miners that are carbon-neutral. 

(In fact, Chang adds Gryphon is pursuing a carbon-negative strategy, with carbon credits.)

Through its partnership with one of the largest digital currency data centers in the world, Gryphon enjoys renewable energy at prices even lower than many competitors.

Through its partnership with one of the largest digital currency data centers in the world, Gryphon enjoys renewable energy at prices even lower than many competitors.

All that to say, Gryphon’s strategy of profit-sharing with renewable energy partners is actually a part of why it’s so efficient compared to many of its competitors.

Gryphon also recently became one of the first miners to be awarded the Green Proofs for Bitcoin certification, based on its clean energy use.

This certification offers clear proof of Gryphon’s dedication to renewable energy for those institutions looking to invest in green crypto companies.

Gryphon (NASDAQ: GRYPclearly values transparency on this issue, and we believe it is the only bitcoin mining company to publicly share its full carbon emissions report over the last two years.

Now, as bitcoin remains close to all-time highs and investor interest is still red-hot, folks looking for a differentiator may find that ESG money is an incentive to watch Gryphon.

Who Will Win Bitcoin’s Halving?

With Bitcoin prices already up over 40% for the year, investor interest is flooding back into the crypto markets, and many experts are calling the start of a new bull market.

Now, since the halving last month, the bitcoin mining sector has changed virtually overnight.

With the economics turning south for many companies, public companies like Gryphon may hold an advantage in being able to raise capital.

We believe that public companies can more easily upgrade machines to boost their efficiency, they can acquire smaller, struggling mining companies to acquire assets at a steep discount.

After joining the Nasdaq via merger in February, we believe Gryphon is in a position to put its history of positive gross profits to good use, and its track record and ESG focus are helping the Company stand apart from the crowd.

By. Tom Kool

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