- Bitfarms deployed 10,000 miners at Stronghold’s Scrubgrass facility, enhancing operational efficiency
- Bitfarms’ stock has continued to fall, amid the broader market pressures.
Bitfarms, a prominent player in the Bitcoin [BTC] mining sector known for its vertically integrated data center operations, has solidified its partnership with Stronghold Digital Mining. It has done so by securing a second hosting agreement through one of its subsidiaries.
This agreement will see the deployment of 10,000 miners at Stronghold’s Scrubgrass facility in Pennsylvania. This will imply shifting from the originally planned site in Yguazu, Paraguay.
These miners are set to start operating in December 2024. This is expected to boost Bitfarms’ capabilities and strengthen its position in the cryptocurrency mining industry.
Execs weigh in…
Remarking on the same, CEO Ben Gagnon said,
“Optimizing our assets with these rapid upgrades at Stronghold’s Pennsylvania sites will provide significant near-term value for Bitfarms.”
Gagnon further highlighted that Bitfarms’ deployment of 20,000 highly efficient miners, in collaboration with Stronghold’s energy facilities, aims to enhance overall fleet efficiency while lowering operational costs.
Thus, by integrating mining directly with Stronghold’s power generation capabilities, Bitfarms would minimize additional capital outlays and gain greater control over energy expenses.
This arrangement would not only facilitate energy trading, but also allow operational flexibility. This will enable the firm to adjust mining activities based on energy market conditions to optimize profitability.
He added,
“We look forward to completing our acquisition of Stronghold and executing our strategy to increase our U.S. footprint and diversify beyond Bitcoin mining.”
Details of the agreement
The Hosting Agreement between Bitfarms and Stronghold will run until 31 December 2025, with annual automatic renewals unless canceled by either party.
Here, it’s worth noting that Bitfarms will share 50% of its mining profits with Stronghold.
That being said, the firm has already deposited $7.8 million to cover estimated power costs for the first three months. This will be fully refunded by the end of the initial term.
This setup ensures operational continuity, while offering Bitfarms some flexibility and cost predictability in its mining efforts.
Bitfarms’ Bitcoin strategy
In June, Bitfarms increased its Bitcoin production to 189 BTC, up from 156 BTC in May. It also sold 134 BTC for $8.8 million, raising its total holdings to 905 BTC – Worth about $57 million.
However, its 2024 output has dropped by over 50%, with only 1,557 BTC mined so far compared to 2,520 BTC at the same time last year.
This decline is due to reduced productivity and lower miner rewards, affecting yields in the crypto-mining industry.
What do market trends indicate?
Finally, the latest data from IntoTheBlock revealed that Bitcoin mining rewards rose from 378.13 BTC ($23.37 million) in June to 493.75 BTC ($35.12 million) in October – A sign of a better reward structure for miners.
Source: IntoTheBlock
In the middle of all this, Bitfarms’ stock fell by 10% in after-hours trading to $1.96 and dipped to $1.93. This coincided with a 2.61% drop in Bitcoin’s value, with the crypto trading at $70,140.91 at press time.
On the contrary, when Bitcoin was in a bullish phase, mining stocks saw impressive gains, with some experiencing hikes of up to 24.4%. For instance, Riot Platforms, a leading force in Bitcoin mining, notably reported a 65% increase in year-over-year revenue.
Powered by WPeMatico
