Bitcoin miners have been increasingly turning to Wall Street for financial exposure, allowing retail investors to get involved in the industry’s growth. However, some miners have been leaning into marketing gimmicks rather than education, leading to a healthy skepticism of the industry.
Take the extreme case of Nasdaq-listed Sphere 3D’s $1.7 billion purchase of 60,000 NuMiners, a Bitcoin mining machine that seemingly appeared out of thin air in early 2022, said Will Foxley, host of The Mining Pod and former director at Compass Mining. Instantly dubbed the ‘Mountain Dew miner’ by online detractors, the machine and company immediately raised eyebrows among mining folks who’d never heard of it.
Nonetheless, on the back of a press release, Sphere3D’s stock instantly pumped 40%. It was all an obvious falsehood, but markets moved regardless, Foxley continued.
The trouble is that not every Bitcoin miner views access to retail investments in a positive way – i.e. as a chance to gain more capital while more supporters for Bitcoin’s wider purpose. Retail investors instead become a cushion for bad mining practices instead of legitimate partners in the business.
It’s time to ask the question: Why aren’t miners leaning into education over marketing? Foxley said.
Luckily, there’s slowly a movement toward professionalization in the mining industry that should be encouraged. For example, most public miners have taken to publishing monthly updates, in addition to their SEC-mandated quarterly filings. Most mining firm executives have taken well to discussion around mining strategy, including dilution, on industry media outlets.
Let’s hope this time next cycle, miners eschew the gimmicks and start taking investor education more seriously.