Mostly Economics

This paper studies the operations and financial valuations of 13 cryptocurrency mining companies that are listed on the NASDAQ stock exchange and have facilities in North America. We find that miners using Texas wind power are offline more than other miners, in a more erratic pattern, while receiving significant revenue augmentations from “curtailment” payments by electric utilities.

Despite having relatively low activity levels, these Texas miners are more profitable than those using more stable sources of energy such as hyrdo power or solar power, as reflected in significantly higher enterprise values.

We find a negative and significant beta between crypto mining stocks and an index of electric utilities, suggesting that ownership of a crypto mining company might provide a useful channel for risk management in the electric power industry.

Didnt know that US bitcoin miners have registered themselves as listed companies on NASDAQ:

Many U.S. bitcoin miners have elected to organize themselves as listed companies on the NASDAQ stock market, and by the end of 2022 more than a dozen publicly traded crypto mining companies, representing about 24% of the global hashrate, had floated their shares alongside those of more traditional miners of gold, copper, aluminum, and other minerals. Operating as public corporations represented a sharp break with the most common patterns of organization in the industry, which had previously been dominated by private partnerships and lone-wolf entrepreneurs.

For  stockholders and bondholders, agreeing to become risk-sharing investors in crypto mines might have seemed unusual, since the essential task in proof-of-work mining involves little more than guessing random integers in an attempt to solve puzzles by trial-anderror. The comparative advantage of crypto miners lies in their ability to guess random integers rapidly, akin to somebody skilled at approaching a lottery kiosk and buying many tickets very quickly.

Disclosures by the publicly traded crypto miners have provided new transparency into the operating risks, leverage, cost structure and supply chain relationships in the mining industry.

Our paper studies how outside shareholders have valued bitcoin miners, and how the publicly traded mining companies have adapted their strategies in an environment that requires regular shareholder reporting and interaction with Wall Street
analysts.

Research on the political and social impacts of financial crises has focused chiefly on free market economies, hindering our understanding of their effects in other settings. We exploit an episode of a financial crisis that hit the Israeli kibbutzim to study its impact in a socialist context. Contrary to findings in capitalistic economies, the crisis led to increased support of liberalized labor markets and reduced support for leftist political parties. These effects persisted in the long run, especially among the young. The crisis also reduced trust in leadership, but trust was restored shortly after agreements to settle the debt were signed, relieving the severity of the crisis. Our findings suggest that economic shocks may have different effects in a free market and socialist systems, in both cases leading individuals to question their current system.