08/21/2024 | Press release | Archived content
Bitcoin miner Gryphon Digital Mining on Tuesday announced entering into an agreement to acquire up to 2.9 MW (megawatts) of $BTC mining operations powered by ultra-low-cost electricity in the $0.01/kWh range, marking the first step in its low-cost power pipeline plans.
Low-cost power with the necessary assets
Under the agreement, Gryphon Digital will acquire power mining operations with per kilowatt hour costs averaging around ~1 cent. The operations come with fully equipped assets, including containers, gas power generators, and 59 PH/s of Bitcoin miners.
The acquisition comes at a cost of $1.5 million, which Gryphon Digital said can be funded by existing working capital. The acquisition will be immediately accretive as it is expected to generate free cash flow on day one. While accretion will depend on usage, the company believes that the acquired low-cost power assets can generate some $1 million in annual revenue.
First step toward thriving, not just surviving
"We believe that this acquisition of ultra low-cost power is our first step along an identified path of over 500 MW of similar low-cost power generation opportunities. The current post halving world is requiring Bitcoin miners to secure low-cost power in order to thrive in an increasing global hashrate environment. With the acquisition of this ~1 cent power asset and future power generation assets with similar costs, we believe Gryphon will enhance its position as a leading low-cost operator with a competitive advantage in a key cost aspect of the Bitcoin mining business," Gryphon CEO Rob Chang said in a statement.
Since the April 20 halving, an increasing number of cryptocurrency miners have been struggling as profit margins have become tighter, power generation costs spiked, and Bitcoin's hashprice plunged.
As of July, many miners were "still bleeding out, writhing in pain," as per prominent $BTC analyst Willy Woo. For Gryphon Digital, acquiring low-cost power mining operations will provide the company with more flexibility to take advantage of various opportunities, including machine hosting and high-performance computing.
With the acquisition of flare gas operations, Gryphon believes it is on a path toward expanding its environmental leadership. The company has been independently certified to be 100% renewable, and in the second quarter, it set a new company record in quarterly hashrate of 899 PH/s (petahash per second) - a 20% increase year-over-year.
Flare gas, typically a byproduct of oil extraction, is usually burned off - flared - to prevent direct release into the atmosphere. Gryphon is expecting to continue contributing to carbon emission goals through its flare gas operations, helping mitigate the environmental impact of Bitcoin mining as it turns waste product into an energy source.
"We expect that low-cost power will allow for the possibility of greater margins using state of the art mining equipment or enabling return on investment on cheaper machines that are not economically viable at higher cost operations," Chang said.