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Cathedra Bitcoin shifts strategy to increase Bitcoin holdings

GrafaGrafa2024/09/17 02:00
By:Liezl Gambe

Canadian Bitcoin (CRYPTO:BTC) miner Cathedra Bitcoin is shifting away from its traditional mining focus to adopt a strategy similar to MicroStrategy's, which emphasises accumulating Bitcoin through open market purchases. 

In a recent "Bitcoin Treasury Strategy Memo" released on September 16, Cathedra outlined its plan to prioritise increasing its Bitcoin reserves on a per-share basis, a metric it described as "the most important" for its largest shareholders.

Cathedra acknowledged that Bitcoin mining had not provided sufficient value to shareholders when measured in Bitcoin terms over the past three years. 

The company noted that nine out of the ten largest publicly listed Bitcoin miners now hold less Bitcoin per share compared to three years ago. 

In contrast, companies like MicroStrategy, which have focused on increasing Bitcoin per share, have been rewarded by equity markets.

As part of this new approach, Cathedra will focus on developing data operating centers that generate "predictable cash flows," which can be used to buy more Bitcoin. 

The company also plans to retain the Bitcoin produced from its existing mining operations, suggesting it will not entirely abandon mining. 

The firm may issue equity, debt options, or hybrid securities to fund additional Bitcoin purchases and could leverage some of its balance sheet assets.

The company’s strategy shift follows its merger with computing infrastructure firm Kungsleden earlier this year, which it believes will help position it to increase Bitcoin per share. 

Cathedra currently holds 23 Bitcoin, valued at around $2.5 million, making it the 45th largest corporate Bitcoin holder.

Despite this pivot, Cathedra’s share price has seen a sharp decline, dropping 91% since its peak in October 2021 to $0.08. 

However, the company remains optimistic about its long-term Bitcoin strategy, describing it as being in the "early innings of a multi-decade trend" where Bitcoin will emerge as a "dominant global reserve asset." 

Founded in 2017, Cathedra is headquartered in Vancouver, British Columbia.

At the time of reporting, the Bitcoin (BTC) price was $57,862.87.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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