Cathedra Bitcoin, a Canadian Bitcoin mining company, is making a major shift in strategy. After seven years of focusing on mining, the company has announced a change of course. Instead of relying solely on mining, Cathedra plans to buy as much Bitcoin as possible directly from the open market. This approach mirrors the aggressive Bitcoin acquisition strategy employed by companies like MicroStrategy, which has seen considerable success with this model.
In a recently released “Bitcoin Treasury Strategy Memo,” Cathedra made clear that all future decisions about capital allocation would now prioritise increasing the firm’s Bitcoin reserves on a per-share basis. For many of the company’s largest shareholders, this metric has become the most significant one. This marks a formalisation of a policy that the company has had in mind for some time but hadn’t fully implemented in a systematic way.
The decision stems from a growing concern that Bitcoin mining, despite being the company’s primary activity for years, has not delivered sufficient value to shareholders, particularly on a per-share basis. The firm pointed out that nine of the top ten Bitcoin miners by market capitalisation currently hold fewer Bitcoins per share than they did three years ago. This trend has driven Cathedra to reconsider its approach, with an eye on increasing the Bitcoin per share held by the company.
Mining, while once a lucrative method of acquiring Bitcoin, has become a more challenging endeavour for many firms. Increasing competition, rising energy costs, and the ever-increasing difficulty of mining new Bitcoins have squeezed profit margins across the industry. Cathedra recognised that merely continuing its existing strategy of mining Bitcoin was not yielding the returns shareholders expected. As a result, the company has chosen a new direction that it believes will better serve the interests of its investors.
The comparison to MicroStrategy is apt. MicroStrategy, a business intelligence company, has made headlines for its bold strategy of buying Bitcoin with large sums of cash, often raised through issuing debt or equity. The company has managed to accumulate a significant Bitcoin reserve, and its stock price has benefitted from its decision to embrace Bitcoin as a core asset. MicroStrategy’s approach has garnered positive reactions from the equity markets, with the firm enjoying a notable boost in valuation due to its aggressive Bitcoin strategy.
Cathedra’s move signals that it intends to follow a similar path. The company plans to develop data centres that will generate consistent, predictable cash flows, which can be used to buy more Bitcoin. At the same time, the firm will continue its mining operations, although it won’t rely on them as heavily as before. Instead of focusing solely on mining, Cathedra aims to retain the Bitcoin it generates from mining and supplement its reserves by purchasing additional Bitcoin from the open market.
To finance these Bitcoin purchases, Cathedra will explore various financial strategies, including issuing equity, debt options, or hybrid securities. By doing so, the company hopes to raise the necessary funds to continue building its Bitcoin reserves. The firm may also consider borrowing against some of its existing balance sheet assets, a tactic often used by other firms looking to leverage their assets to acquire more Bitcoin.
Cathedra’s leadership expressed confidence that the company’s recent merger with Kungsleden, a computing infrastructure firm, will further strengthen its position. The merger, completed in early March, has provided Cathedra with the technological capabilities needed to support its new strategy. The combination of resources from both companies is expected to enhance Cathedra’s ability to generate more revenue, which will be funnelled into Bitcoin acquisitions.
The shift in strategy is a notable one, but Cathedra is not the first company to make this kind of change. Several other firms, including Metaplanet, have adopted similar approaches, choosing to invest heavily in Bitcoin rather than relying solely on their core operations. For Cathedra, this decision reflects a growing recognition that, in the current market environment, accumulating Bitcoin can offer greater long-term value than traditional business operations alone.
The firm’s current Bitcoin holdings are relatively modest compared to some of its larger counterparts. According to Bitcoin Treasuries data, Cathedra currently holds 23 Bitcoins, which are valued at approximately $2.5 million. This makes it the 45th largest corporate Bitcoin holder. However, with its new strategy in place, the company aims to significantly increase this number in the coming months and years.
For Cathedra, the decision to shift focus towards Bitcoin acquisition rather than mining represents a major shift in how the company operates. It underscores a broader trend within the cryptocurrency industry, where companies are increasingly viewing Bitcoin not just as a digital currency, but as a store of value and a core asset that can drive long-term growth.
While the new strategy is ambitious, it also carries risks. Bitcoin’s price is notoriously volatile, and any company that invests heavily in the cryptocurrency must be prepared to weather the ups and downs of the market. However, Cathedra appears confident that its plan will ultimately deliver better results for its shareholders.
The company’s decision to continue mining, albeit with less emphasis than before, provides a degree of stability. Mining may not have provided the kind of returns Cathedra had hoped for in recent years, but it still offers a way to generate Bitcoin, which can then be added to the company’s reserves. By retaining the Bitcoin generated from mining operations, Cathedra is positioning itself to benefit from any future increases in Bitcoin’s value.
Cathedra’s move to prioritise Bitcoin acquisition also reflects a broader shift in how businesses are approaching cryptocurrency. As more companies recognise the potential of Bitcoin as a long-term asset, they are increasingly integrating it into their financial strategies. This trend is likely to continue as Bitcoin becomes more widely accepted in both corporate and financial sectors.
Cathedra Bitcoin’s decision to pivot from mining towards a focus on Bitcoin acquisition marks a significant turning point for the company. By prioritising the accumulation of Bitcoin on a per-share basis, Cathedra aims to deliver greater value to its shareholders and position itself for future growth. With a solid plan in place and the resources to execute it, the company is well-positioned to navigate the challenges of the cryptocurrency market and emerge as a stronger, more resilient player in the space.
