Cathedra Bitcoin Inc. Shifts Focus to Bitcoin Treasury

19 Sept

Cathedra Bitcoin Inc. has formalized its Bitcoin Treasury Strategy, emphasizing its commitment to maximizing Bitcoin holdings per share for its shareholders. In a memo , Cathedra’s leadership highlighted their belief in Bitcoin’s long-term potential as a dominant global reserve asset and outlined a detailed strategy to grow their Bitcoin reserves while moving away from traditional mining operations.

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The memo reflects the company's evolving approach, shaped by their Bitcoin thesis, which envisions Bitcoin playing a central role in the global financial landscape over the coming decades. This view has been a cornerstone of Cathedra’s philosophy, articulated as early as 2022 in a letter to shareholders. Bitcoin’s strong performance in the last decade, coupled with favourable macroeconomic and geopolitical conditions, drives the company’s strategic decisions.

Cathedra’s primary goal is now to accumulate Bitcoin (or “sats,” the smallest unit of Bitcoin) on behalf of its shareholders. The memo stresses that growth in Bitcoin per share has become the most important performance metric, as repeatedly expressed by their largest shareholders. To this end, Cathedra is repositioning its business model, moving away from Bitcoin mining in favour of more predictable cash flow-generating ventures, such as data centre development and operation.

Moving Away from Bitcoin Mining

The memo notes that Bitcoin mining has proven to be an unreliable method for increasing shareholders’ Bitcoin per share. According to Cathedra’s research, nine of the ten largest publicly listed Bitcoin mining companies have seen their Bitcoin holdings per share decrease over the last three years, with Cathedra experiencing similar results.

This shift away from mining aligns Cathedra with companies like MicroStrategy, which have adopted explicit policies to increase their Bitcoin holdings per share and have been rewarded by the market. Cathedra’s recent merger with Kungsleden, a company involved in data center operations, is expected to help the company achieve its objective of Bitcoin growth.

New Strategies to Accumulate Bitcoin

The memo outlines several strategies Cathedra may employ to grow its Bitcoin per share, including:

Retaining Bitcoin generated from existing mining operations, though expansion of these operations is unlikely.
Acquiring Bitcoin through market purchases using cash flow from data center hosting services or upside-sharing agreements with hosted miners.
Borrowing against balance sheet assets, such as data centers or existing Bitcoin, to purchase more Bitcoin.
Utilizing Bitcoin-linked derivatives to generate income for acquiring additional Bitcoin.
Developing new assets, provided these investments lead to increased Bitcoin per share.
Issuing equity, debt, or hybrid securities to fund Bitcoin purchases, even if these financings appear dilutive by conventional metrics, as they could be accretive in terms of Bitcoin per share.

At present, Cathedra holds 43 Bitcoin, equivalent to 5 sats per share, based on their voting share structure. The company plans to provide updates on its progress in the coming quarters, as it continues to refine its Bitcoin accumulation strategy.

Disclaimer on Forward-Looking Information

Cathedra cautions investors that the memo contains forward-looking statements, subject to assumptions and risks that could lead to outcomes differing from the company’s expectations. Investors are urged not to place undue reliance on these projections and to consult public filings for a detailed risk assessment. The memo also notes that the content has not been reviewed by any securities regulator, including the TSX Venture Exchange.

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