In a strategic move to bolster its U.S. presence, cryptocurrency mining company Bitfarms has inked a second hosting agreement with Stronghold Digital Mining, set to dramatically increase operations at its Pennsylvania facility. Under the terms of this deal, Bitfarms will deploy an additional 10,000 Bitcoin mining machines at Stronghold’s Scrubgrass site, a site known for its sustainable power generation, pushing Bitfarms closer to its U.S. expansion goals.
Expanding Capacity And Efficiency
Bitfarms CEO Ben Gagnon outlined the strategy behind the partnership, highlighting the efficiency gains expected from the expansion. “Vertically integrating our operations with Stronghold’s existing power generation infrastructure reduces capital expenditure and allows us to better manage our power costs,” Gagnon stated. This partnership will support the company’s objective of optimizing operational costs and enhancing power efficiency.
The combined addition of 20,000 miners across Stronghold’s Pennsylvania sites is projected to significantly increase Bitfarms’ mining efficiency, leveraging Stronghold’s on-site energy generation to cut down on energy costs—a crucial advantage as mining operations aim to remain profitable amidst fluctuating cryptocurrency prices.
Advantages of Local Energy Partnerships
Unlike traditional setups that rely on the open grid, Stronghold’s infrastructure includes on-site power generation, which provides a stable energy source for mining operations. This setup offers Bitfarms more flexibility, especially in energy trading and managing costs. According to Gagnon, Bitfarms will leverage the unique capabilities of Bitmain’s T21 mining hardware, designed to accommodate various operational modes and maximize output, providing a competitive edge in an increasingly crowded mining industry.
To cover initial power costs, Bitfarms paid a refundable $7.8 million deposit to Stronghold, reflecting the scale of its investment. After initial costs are covered, Bitfarms and Stronghold will split mining profits, with Stronghold receiving 50% of the monthly revenue generated from the additional machines.
Strategic Move from Paraguay to the U.S.
The 10,000 miners originally allocated for deployment at Bitfarms’ Yguazu site in Paraguay will now contribute to its Pennsylvania operations. This shift demonstrates Bitfarms’ strategy to strengthen its footprint in the U.S. market, potentially setting the stage for broader expansion into American soil. Bitfarms now operates 12 data centers globally, with facilities across the United States, Canada, Paraguay, and Argentina, predominantly powered by renewable hydroelectric energy sources.
Also Read: Riot vs. Bitfarms – The $1.2B Bitcoin Mining Showdown Heating Up Ahead Of Oct. 29 Vote
Despite the positive outlook of this expansion, Bitfarms’ stock (BITF) took a hit, falling by 10% to $1.96 in after-hours trading on the announcement day. The decline aligns with a general downturn in crypto markets, which have shed roughly 6% over the past day. Industry-wide volatility and tightening regulatory scrutiny on Bitcoin mining in certain regions may pose challenges for Bitfarms’ ongoing growth efforts.
This collaboration with Stronghold marks another strategic step for Bitfarms as it aims to reinforce its U.S. presence, capitalize on efficient power management, and maintain resilience against market volatility. With energy cost control as a cornerstone of its strategy, Bitfarms’ decision to partner with Stronghold could pave the way for further integration with domestic energy providers, signaling a shift towards sustainable, cost-effective mining solutions within the U.S.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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