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CleanSpark Orders Purchases of New Bitcoin Mining Rigs to Survive Bear Market

Nevada-based bitcoin mining firm CleanSpark, Inc, announced on Thursday that it has placed a purchase order for 1800 Antminer S19 XP units as it continues expanding its infrastructure.

Once fully deployed, CleanSpark expects the mining machines to add over 252 petahashes per second (PH/s) to the company’s bitcoin mining capacity.

As per the acquired contract, the company said that the Antminer S19 XP machines will begin arriving at CleanSpark’s facilities in August, and shipping will continue taking place through the next six months.

Besides that, CleanSpark disclosed that it has partnered with TMGcore Inc – a major developer of data centre hardware specializing in next-generation liquid immersion cooled technologies – to expand its immersion-cooled infrastructure for sustainable mining.

The new partnership with TMGcore includes 257 units of TMGcore’s proprietary immersion-cooled tanks that are designed to improve the performance of CleanSpark’s mining machines while significantly reducing their failure rates over long-term use.

CleanSpark plans to deploy the units in batches at its College Park, Georgia, and its facilities in other locations as determined. The partnership also provides CleanSpark with 2 megawatts (MW) of colocation capacity at TMGcore’s state-of-the-art immersion-cooled mining facility in Plano, Texas.

A Decline of Mining Profitability

The latest move seems that CleanSpark is taking advantage of the bear market and falling prices for Bitcoin mining rigs by purchasing new efficient miners.

It appears that the bearish market is hitting all sectors of the crypto space, including mining firms which are responsible for validating transactions and maintaining the network integrity of the Bitcoin network.

Currently, many Bitcoin miners are selling off their mined tokens as the reduced price of Bitcoin has slashed their profit margins. This happens coincidentally with wider capital markets that have become less friendly with major indexes officially entering a bear market, having lost 20% or more this year.

While the hard situation has forced some miners to close their businesses one by one, the survivors like Core Scientific, Marathon, Riot, Hut 8 and Bitfarms are not without casualties as news about their struggles has also emerged. Some of these firms started selling some of their mined Bitcoins that they normally hold on their balance sheets in order to pay for operational expenses.

However, the current difficult market condition is an opportunity for survivors to accumulate both Bitcoin and Bitcoin mining rigs. Firms that are prepared and acquire the latest generation equipment with locked-in power rates will benefit from current market conditions.

Greenidge Generation’s Bitcoin Mining Production Rose 18% in June

Greenidge Generation Holdings Inc., a US-based Bitcoin mining company, announced its mining production increased by about 18% in June.

According to its monthly operating update released on Monday, Greenidge said it produced approximately 230 Bitcoins in June, an increase of about 18%, compared to 195 Bitcoins it mined in May.

The miner disclosed that it increased its hashrate capacity to 2.5 exahash per second (“EH/s”) from 27,500 mining machines in June, an increase from 1.7 EH/s of mining capacity from 20,400 mining machines in the previous month.

Greenidge stated that it ordered an additional 200 mining machines, which are in transit, as they will be installed upon their arrival.

The miner said last month it located 24% of the hash rate capacity at its facility in Spartanburg, South Carolina, which was acquired and its operations started in December last year. Greenidge further said it has mined a total of 1,183 Bitcoins for the six months ended June 30.

Meanwhile, at the end of last month, the New York regulator denied the renewal of Greenidge Generation’s air permit.

On June 30, New York’s Department of Environmental Conservation (NYSDEC) denied a key permit for a gas-powered cryptocurrency mining facility owned by Greenidge on the shores of Seneca Lake. The regulator said the mining facility produces too much planet-warming pollution that cannot be allowed under the state’s climate law.

However, Greenidge vowed to appeal the decision through the legal process and said it will keep operating as usual. The 106 MW Greenidge gas plant hosts a large-scale Bitcoin mining facility, with about 17,000 mining machines.

Adapting the Bear Market

The current sharp decline in Bitcoin price has made it difficult for several mining operations to generate a profit. While this bear market has caused many facilities to close their shop, experienced miners are becoming creative and capturing greater market share.

Successful mining firms have deployed innovative new strategies to gain competitive advantages through energy efficiencies; minimizing capital expenditures and operating expenditures.

Last month, Argo Blockchain plc, a major global cryptocurrency mining firm, mined 179 Bitcoins in June compared to 124 BTC in May 2022. The firm sold 637 BTC in June to offset operating expenses and outstanding loans.

Early last month, Hut 8, a Canada-based Bitcoin mining company, bought 5,800 mining machines to add higher petahashes per second (PH/s) of hashrate to its Bitcoin mining capacity at its Ontario facility.

To address electricity concerns, Aspen Creek Digital Corporation (“ACDC”), a U.S.-based crypto mining firm, launched a six-megawatts solar-powered facility for its new mining operations in the western part of Colorado.

The above examples show some of the successful, experienced Bitcoin mining firms that so far have been able to thrive regardless of Bitcoin Price by using flexible, long-term strategies that minimize monthly operating expenses.

Blockchain.com Slashes 25% Workforce amid Crypto Meltdown

Massive layoffs continue engulfing the crypto market. Blockchain.com took the latest actions by reducing its workforce by 25%.

Citing harsh bearish conditions, the crypto exchange laid off approximately 150 people and shut down its offices based in Argentina.

Blockchain.com has been on a rapid expansion drive in the last 16 months as a pioneer firm in the cryptocurrency industry, with its staff jumping from 150 to 600. Per the announcement:

“Some 44% of the impacted employees are in Argentina, 26% in the U.S., 16% in the U.K., and the remaining from the rest of the world.”

The recent collapse of crypto hedge fund Three Arrows Capital (3AC) dented the exchange’s financial position after losing $270 million.

Blockchain.com CEO Peter Smith mentioned in a letter to shareholders, “Three Arrows is rapidly becoming insolvent, and the default impact is approximately $270 million worth of cryptocurrency and U.S. dollar loans from Blockchain.com.”

The exchange has also stopped all mergers and acquisitions (M&A), reduced institutional lending, and slowed its establishment in the non-fungible token (NFT) marketplace.

The crypto meltdown being experienced has seen Bitcoin (BTC) shed more than 65% of its value from the all-time high (ATH) price of $69,000 recorded in November last year.

As a result, the market downturn has triggered significant layoffs in the crypto space. For instance, crypto exchange Crypto.com and lending platform BlockFi recently announced plans to cut over 400 jobs globally.

Furthermore, crypto exchange Gemini made the second round of layoffs, citing “turbulent market conditions.” Therefore, it seems the layoffs have mostly affected cryptocurrency exchanges.

Bitcoin Miner Core Scientific Secures $100m Financing amid Bear Market

Core Scientific, a publicly traded Bitcoin mining firm based in the US, announced Thursday that it has entered into a common stock purchase agreement for up to $100 million with B. Riley investment bank.

Core Scientific plans to use the net proceeds to boost its balance sheet and help the firm expand its crypto mining operations.

Under the terms of the agreement, Core Scientific has the right in its sole discretion, but not the obligation, to issue and sell to B. Riley up to $100 million worth of shares of its common stock from time to time over the approximately 24-month term of the purchase agreement.

Core Scientific dominates the timing and amount of any sales of its shares of common stock, and B. Riley is obligated to make purchases, subject to certain limitations and satisfaction of certain conditions set in the agreement.

The mining firm has issued 573,381 shares of its common stock to B. Riley as consideration for the bank’s commitment to purchase Core Scientific common stock.

Mike Levitt, Core Scientific Chief Executive Officer, talked about the development: “Securing access to additional capital during adverse market conditions enhances our liquidity and expands our strategic optionality. We continue to strengthen our balance sheet and streamline our operations as we remain focused on expanding our capacity for self-mining and colocation services. This Committed Equity Facility with B. Riley is an important additional funding source that will help us grow and create shareholder value.”

Strengthening Balance Sheet in Challenging Environment

The move by Core Scientific comes as the ongoing bear market has impacted mining profitability as well as operations of public Bitcoin miners. Most of these miners have been forced to sell off their BTC reserves as crypto winter continues to ravage.

Last month, Toronto-based Bitfarms sold 1,500 Bitcoins—almost half its supply—to reduce debt. Early this month, Core Scientific sold 7,202 Bitcoins at an average price of $23,000 to raise about $167 million. The company planned to use the proceeds for debt repayments, capital investments in additional data-centre capacity, and payments toward ASIC servers.

Such strategic changes enable these firms to focus on their key priorities of maintaining their operations and continuing to grow their business in anticipation that mining economics will improve.

Bitcoin Mining Difficulty Spikes 13.55%, Reaches New ATH of 35.6 Trillion Hashes

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According to the latest data collected from BTC.com, Bitcoin mining difficulty has increased by 13.55% since the last adjustment around two weeks ago.

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The current difficulty adjustment now takes 35.6 trillion hashes to generate one Bitcoin (BTC), a massive increase of 13.55% from the previous estimates. As per the data, the hike is the highest increase in Bitcoin mining difficulty since May 2021.

Source: BTC.com

The network rate now stands at 257 million TH/s (terra hashes per second), a massive increase over the 140 million TH/s it had at this time last year, BTC.com data indicated.

Despite pressure from declining prices being witnessed this year, the difficulty adjustment continues its steady rise while the competition among its miners has been growing. High difficulty means it takes more computing power to mine the same number of blocks and makes the network secure. An increase in mining difficulty also means that miners must put in more computing power in order to mine a block. And miners compete against each other for limited block rewards. With more participants and more computing power, the so-called “hashpower” of the entire network increases significantly, which is good for Bitcoin’s price in the long run.

Mining difficulty in the Bitcoin network is adjusted automatically every two weeks after 2,016 blocks have been mined in the network. The next difficulty adjustment will take place on October 24.

Increasing difficulty suggests more challenges ahead for Bitcoin miners who are already feeling the heat from the weak Bitcoin prices and higher energy costs. The bear market has been rough for the miners, who have seen profit margins shrink as Bitcoin prices crashed more than 50% this year while capital dried up and power prices surged.

Last month, one of the largest Bitcoin mining data centres, Compute North, filed for bankruptcy, citing the severe bear market, trouble with its largest lender, and supply issues. On Friday last week, Bitcoin miner Argo Blockchain raised $27 million after agreeing to issue 87 million shares to a sole investor in bids to ease liquidity pressures.