A new week closes in the hectic world of cryptocurrencies as expectations grow regarding the expected rate cut in the US. In this article, as usual, we present you a summary of the most important news about the Bitcoin Mining sector.
The digital mining industry is crucial to the stability of the broader Cryptocurrency market. Therefore, keeping track of what happens with these companies can be of great interest to analysts and investors. Among the most important data this week is that the mining process is becoming more and more difficult.
On the other hand, it is striking that the price of BTC remains well below the average cost of mining a coin. This is particularly worrying for the stability of a good part of medium and small businesses. If you want to know about these and other news, we invite you to continue reading this summary.
Top 5 Bitcoin Mining News Stories
In this new edition (issue 166) of our classic Bitcoin mining news roundup, we present to you the five most important points of this week.
1. Bitfarms accelerates integration agreement with Stronghold
Mining firm Bitfarms recently announced that it has signed a hosting agreement with Stronghold Digital Mining to bring an additional 2.2 EH/s of power online during October 2024, two months ahead of schedule.
The deal will add 10,000 Bitmain T21 miners to Bitfarms’ Panther Creek, Pennsylvania, facility and will begin operations on Oct. 1. Ben Gagnon, Bitfarms’ chief executive, highlighted the expansive potential of the company’s Pennsylvania sites and said they would be key to diversifying the firm’s business operations.
Gagnon explained that the sites provide access to energy trading opportunities, competitive energy costs, and HPC/AI. Bitfarms will pay Stronghold a fee equal to 50% of the profits generated by the miner hosting agreement. The latter will be renewed annually until either party decides not to renew the contract.
2. Average production price of 1 BTC continues to be well above the price of the coin
Another piece of Bitcoin mining news that continues to cause nervousness in the industry is the production price of 1 BTC. According to data from the MacroMicro portal, the average cost to produce a coin (BTC) amounts to $77,792 dollars.
Meanwhile, the cost of the coin on the spot market is $59,831 per unit at the time of writing. In this sense, it is more profitable for mining companies to buy BTC than to produce it. The level of operating costs continues to rise, especially in the United States, where most of this industry is concentrated.
Thus, the deficit of almost $18,000 for each coin generated becomes a source of pressure for mining companies. Particularly, medium and small companies are the ones that feel this unprofitable reality the most.
Average production price of a BTC remains well above the value of the currency on the spot market. Source: Macromicro
3. This Norwegian city wants to expel the miners
A curious development this week in the mining world has to do with Hadsel’s disdain for the crypto industry. This is a town in Norway whose residents want to expel miners for a variety of reasons. One of them is the constant increase in energy prices, as CoinTelegraph reported.
High demand from mining companies is causing electricity bills to rise in areas where the service is limited. “When politicians shine the light on Bitcoin, people suffer,” Daniel Batten, a well-known venture capitalist focused on climate technology, tells X.
The mayor of the city, Kjell-Børge Freiberg, told local media that the noise from the company based in Hadsel disturbs people. As can be seen, the mistrust against the mining sector seems to have several causes. Some of them, such as noise and high energy bills, are perfectly valid. Others, such as alleged environmental pollution, are more debatable.
4. Mining companies continue to buy ASICs despite the poor times in the sector
Another of the most notable news about Bitcoin mining in recent days has to do with the constant purchase of ASICs. In this sense, despite the decrease in income and the increase in operating costs, Bitcoin miners continue to invest in machines.
This shows enormous confidence in the future of the network. A report from Glassnode indicates that Bitcoin’s hash rate remains near all-time highs, although revenue is falling. The industry faces the challenge of increasing mining difficulty and declining revenue from transaction fees, which increases production costs.
Despite these challenges, miners are adopting new strategies, such as holding a portion of their mined Bitcoin in reserves, rather than selling it to cover operating costs. This reflects significant confidence in Bitcoin’s future price appreciation, and there is also interest in diversifying into artificial intelligence computing.
Bitcoin difficulty and hashrate remain near all-time highs. Source: Glassnode
5. CleanSpark increases farm purchases in Tennessee
CleanSpark announced that it will acquire seven Bitcoin mining facilities in Knoxville, Tennessee. The cost of the purchase will be $27.5 million, which equates to approximately $324,000 per megawatt. The closing agreement for each site is expected to occur by September 25.
Once the new S21 Pro miners are installed, the combined operating hash rate will reach 5 EH/s. This will consequently represent a 22% increase in CleanSpark’s current capacity.
The mining company’s CEO, Zach Bradford, highlighted that this expansion will allow the company to reach 37 EH/s before the end of 2024. CleanSpark has implemented a similar strategy in Georgia, where it invested almost $1 billion. The company seeks to take advantage of Tennessee’s political and energy environment, which is comparable to Georgia’s, to expand its presence in the region.
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