Cathedra Bitcoin cools off mining to tap MicroStrategy playbook

Canadian Bitcoin miner Cathedra Bitcoin is shifting its focus after seven years of mining, adopting a new strategy: acquiring as much Bitcoin as possible on the open market, following the approach of MicroStrategy.

In a Sept. 16 “Bitcoin Treasury Strategy Memo,” Cathedra explained its new plan will see “all capital allocation decisions” now geared toward maximizing the firm’s Bitcoin ( BTC ) reserves on a per share basis — the “most important” metric for many of its largest shareholders. 

“This represents the formalization of a policy we have always held loosely in our minds but have not always allowed to guide our decisions in a disciplined way.” 

Source: Cathedra Bitcoin

Cathedra said mining Bitcoin had not provided enough shareholder value on a Bitcoin basis. Nine of the 10 largest Bitcoin miners by market cap now hold less Bitcoin per share than they did three years ago, Cathedra claimed, adding: 

“Meanwhile, other listed companies have adopted an explicit policy of increasing bitcoin per share, most notably MicroStrategy (NASDAQ: MSTR), and have been rewarded by equity markets.”

Cathedra says it will instead move to develop data operating centers to generate “predictable cash flows” to buy more Bitcoin and will retain the Bitcoin it produces from its existing mining operations — it said, suggesting the firm won’t be scrapping mining entirely.

Similar to firms like MicroStrategy and Metaplanet, Cathedra will issue equity, debt options, or hybrid securities to buy more Bitcoin. The firm may also borrow against some of its balance sheet assets.

Cathedra also expressed confidence its recent early March merger with computing infrastructure firm Kungsleden will position it well in increasing Bitcoin on a per-share basis.

Bitcoin Treasuries data shows that the firm currently holds 23 Bitcoin, worth $2.5 million, making it the 45th largest corporate Bitcoin holder.

Related: Metaplanet, Semler Scientific were ‘zombie companies’ until Bitcoin, execs say

Cathedra boasts a near-$20 million market cap on Canada’s TSX Venture Exchange.

However, its share price has tanked 91% since its peak in late October 2021 — when Bitcoin was fast approaching its previous high — to $0.08 (0.059 Canadian dollars), Google Finance data shows.

Cathedra Bitcoin’s change in share price so far in 2024. Source: Google Finance

Cathedra’s statement suggests the firm plans to be long on its Bitcoin strategy, stating that we’re in “the early innings of a multi-decade trend” that will see Bitcoin emerge as a “dominant global reserve asset.”

The firm was founded in 2017 and is headquartered in Vancouver, British Columbia, on the west side of Canada.

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