CleanSpark Inc., a prominent United States-based Bitcoin miner, is reportedly gearing up to establish an in-house trading desk in 2024, aiming to optimize returns from its substantial Bitcoin holdings. This strategic move, as revealed by CleanSpark CEO Zachary Bradford, is driven by the belief that managing trading internally aligns with the company’s interests, particularly given its significant bitcoin balance.
Notably, last month, the company reported that it held 3,002 BTC at the end of December 2023, valued at approximately $116 million at current market prices.
This robust bitcoin balance serves as the foundation for the company’s decision to delve into in-house trading, as highlighted by Bradford, who stated:
“We really think that doing it ourselves is the best way, especially with the large Bitcoin balance we have. It just makes financial sense to do it in-house.”
Trading Strategy and Risk Management
The in-house trading desk is expected to formulate strategies centered around regulated digital asset offerings, with a particular focus on option contracts traded on the Chicago Mercantile Exchange (CME) and its affiliates.
Bradford emphasized that while there might be a need to allocate a small portion to different accounts, the bulk of his company’s bitcoin holdings will remain in cold storage custody. He stated:
“We may have to move a small amount into different accounts, but we will keep the cold storage custody with holders like Coinbase with segregated accounts.”
Industry Trends and Competitor Actions
It is interesting to note that CleanSpark‘s CEO predicts a growing trend among Bitcoin miners to establish in-house trading desks, a sentiment shared by industry competitors, including Marathon.
The rationale behind this trend lies in the ability to manage risk profiles and expertise internally, providing closer oversight of trading activities.
This aligns with the broader industry trend of Bitcoin miners diversifying their strategies and incorporating innovative approaches to maximize returns from their digital asset holdings. Marathon Digital, for instance, has reportedly ventured into leveraging digital asset derivatives to optimize its bitcoin reserves.
Established in 2014, CleanSpark is reported to autonomously manage five data centers located in Georgia. The company impressively showcases a cumulative developed capacity of 230 megawatts (MW), according to data by MarketScreener.
CleanSpark’s Stock Price Increased in 2023
CleanSpark’s share price exhibited significant growth in 2023, surging almost 440% to reach around $11, propelling the firm’s market capitalization to $2 billion. This rebound follows an 80% share price decline in 2022, when the broader bitcoin market experienced a substantial downturn. Reiterating this transformation, the company stated in December 2023’s bitcoin mining update:
“This [2023] was a transformative year for CleanSpark. We set new records in bitcoin mining, surpassing all our previous achievements with over 7,300 bitcoins mined this year, a 60% increase over 2022.”
Remarkable Increase in Bitcoin Holdings
Examining CleanSpark’s Bitcoin holdings over time reveals a notable shift. According to Bitcoin Treasuries, CleanSpark held 143 BTC as of September 2022, a number that surged to 3,002 BTC by December 2023.
As CleanSpark navigates the evolving digital asset landscape, the success of its in-house trading initiative may set a precedent for Bitcoin miners seeking to optimize their holdings and adapt to the dynamic market conditions.
