Riot Platforms Braces for Bitcoin Halving Impact, Plans Acquiring Bitfarms
Summary:
Riot Platforms, a Bitcoin mining firm, produced 215 BTC in May, marking a 43% decrease from April due to the Bitcoin halving in April that slashed mining rewards. To buoy Bitcoin production, Riot launched a new mining facility in Texas, increasing its mining capacity. The company also plans on boosting its total hash rate capacity to 31 EH/s by 2024, and 41 EH/s by 2025. To cut costs and enhance efficiency, Riot uses high-efficiency mining equipment and a unique power strategy. Additionally, Riot proposed to purchase its competitor, Bitfarms.
In May, Riot Platforms, a Bitcoin (BTC) mining company, reported the production of 215 BTC, a 43% nosedive from the previous month. This reduction in earnings from mining is an aftereffect of Bitcoin halving on April 20, a change affecting the entire mining sector by cutting mining rewards to 3.125 BTC. Riot anticipated the industry-wide downfall and scheduled an infrastructure enhancement to maintain BTC production after the halving event.
In the same month, Riot kickstarted a fresh BTC mining operation in Corsicana, Texas, augmenting 3.1 exahashes per second (EH/s) to the company’s collective self-mining capacity, making a total of 14.7 EH/s, marking a 17% boost from the preceding month. Currently, the newly established mining operation runs at 100 megawatts (MW) with plans for escalation up to 1 gigawatt (1,000 MWs) upon final completion.
Riot has set its sight on attaining a cumulative hash rate capacity of 31 EH/s by the close of 2024, aiming for 41 EH/s by 2025. The company has entered into a binding master purchase agreement with MicroBT, placing an initial order for 33,280 miners designated for the new facility.
Riot's strategic approach aims at securing profitability, especially amid bear markets. In efforts to mitigate operational costs, Riot transitioned towards the use of high-efficiency mining equipment and initiated a distinctive power tactic. Jason Les, CEO of Riot, disclosed that their unique power strategy, predominantly implemented in the summer, has already started showing promising results, generating about $7.3 million in power and demand response credits in May.
On May 28, Riot Platforms declared its intention to acquire its competitor, Bitfarms, offering substantially more than its share value. At the time of the offer, Riot was already the significant shareholder of Bitfarms, owning a 9.25% stake. The acquisition proposal contained a mix of cash and common stock, amounting to $950 million in equity value for shareholders, presenting a 24% premium over Bitfarms’ one-month volume-weighted average share price as of May 24. This offer emerges amid a leadership transition at Bitfarms as they are on the lookout for a new CEO.
Published At
6/5/2024 12:05:55 PM
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