Bitcoin Miner Cathedra Halts Mining Operations to Purchase BTC on Open Market

Canadian Bitcoin mining company Cathedra Bitcoin is shifting its strategy after seven years in the industry. The firm is now focusing on acquiring as much Bitcoin as possible from the open market, aligning with the plans of companies like MicroStrategy.

Read the Company's bitcoin treasury strategy memo here: https://t.co/ZHW8gcJ9PQ pic.twitter.com/xrk5LBCpsW

— Cathedra Bitcoin (@CathedraBitcoin) September 16, 2024

Cathedra’s New Bitcoin Acquisition Strategy

In a memo dated Sept. 16, Cathedra outlined its new direction. All capital allocation decisions will prioritize increasing the company’s Bitcoin reserves on a per-share basis. According to the memo, many of the company’s key shareholders consider this metric the “most important.”

The company acknowledged that while this approach had been informally considered, it had yet to consistently influence its decision-making process. Cathedra further stated that mining Bitcoin alone had not delivered sufficient value for shareholders regarding Bitcoin holdings. Nine of the top ten Bitcoin miners by market cap now hold fewer bitcoins per share than three years ago.

Cathedra pointed out that firms like MicroStrategy have explicitly adopted strategies to increase Bitcoin per share and have seen positive reactions from equity markets. As part of its new approach, Cathedra plans to shift focus toward developing data centers that generate predictable cash flows, which will then be used to purchase more Bitcoin.

To finance these purchases, Cathedra plans to issue equity, debt options, or hybrid securities, following in the footsteps of companies like MicroStrategy and Metaplanet. The firm also mentioned it may borrow against some of its balance sheet assets to fund additional Bitcoin acquisitions.

Merger Optimism and Bitcoin Holdings

Cathedra expressed optimism that its merger with computing infrastructure company Kungsleden earlier this year will enhance its ability to grow its Bitcoin holdings on a per-share basis. The company also intends to retain the Bitcoin it mines from its current operations, indicating it won’t be exiting the mining sector entirely.

According to Bitcoin Treasuries data, Cathedra holds 41 Bitcoins, valued at approximately $2.4 million, ranking it as the 45th largest corporate Bitcoin holder. Despite its near-$20 million market capitalization on the TSX Venture Exchange, the company’s share price has plummeted by 91% since its peak in late October 2021, now at $0.08, per Google Finance.