Key Points
Bitfarms has entered into a second hosting agreement with Stronghold Mining, deploying 10,000 miners at its Scrubgrass facility. The move is expected to improve Bitfarms' operational efficiency and its position in the cryptocurrency mining industry. Bitfarms, a key player in the Bitcoin mining sector , has its partnership with Stronghold Digital Mining. This is made possible by a second agreement concluded with one of its subsidiaries. The agreement provides for the deployment of 10,000 miners to Stronghold Scrubgrass in Pennsylvania. This is a change from the site originally in Yguazu, Paraguay. These miners are expected to begin operating in December 2024, a move that is expected to enhance Bitfarms’ capabilities.
CEO’s Insight
Bitfarms’ CEO, Ben Gagnon, expressed optimism about the new development. He stated that the upgrades at Stronghold’s Pennsylvania sites would provide significant near-term value for Bitfarms. The deployment of 20,000 efficient miners, in conjunction with Stronghold’s energy facilities, aims to enhance fleet efficiency and reduce operational costs.
Gagnon further noted that by integrating mining directly with Stronghold’s power generation capabilities, Bitfarms would minimize additional capital outlays and gain more control over energy expenses. This arrangement is also expected to facilitate energy trading and allow operational flexibility, enabling the firm to adjust mining activities based on energy market conditions to optimize profitability.
Agreement Details
The Hosting Agreement between Bitfarms and Stronghold will last until 31 December 2025, with automatic annual renewals unless canceled by either party. Notably, Bitfarms will share 50% of its mining profits with Stronghold. The firm has already deposited $7.8 million to cover estimated power costs for the first three months, which will be fully refunded by the end of the initial term.
Bitfarms’ Bitcoin strategy saw an increase in its Bitcoin production to 189 BTC in June, up from 156 BTC in May. 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 attributed to reduced productivity and lower miner rewards, affecting yields in the crypto-mining industry.
Despite the challenges, 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. This indicates a better reward structure for miners. However, Bitfarms’ stock fell by 10% in after-hours trading to $1.96 amidst a 2.61% drop in Bitcoin’s value.