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Bitfarms, the stock traded bitcoin miner has grown sufficiently to buy an entire hydropower plant in the Washington state, the company said.
The purchase was for $26 million, $23 million in cash and $3 million in common shares based on a price of $7.17, for a total of 414,508 shares.
“Bitfarms strategy is to expand our operating footprint while maintaining cost effective production rates. By diversifying our decentralized mining portfolio, we prioritize locations with cost-effective electricity that allow for further growth and expansion,” Emiliano Grodzki, CEO of Bitfarms, said before adding:
“The Washington farm meets all these criteria. With this acquisition, we enter the United States and continue our global expansion to 10 farms in operation or under development in four countries. The initial 24 MW acquisition will increase our total mining capacity to 106 MW and boost our total hashrate as additional miners are installed.”
They don’t specify which powerplant they got exactly. Based on their description of “24 MW of infrastructure in Washington,” it is probably the Electro powerplant operated by Electron Hydro LLC (pictured above) in the Puyallup River near Kapowsin, Pierce County. One of many hydro powers in Washington.
“The facility’s hydro power is expected to cost approximately 25% less than the average cost of power at our Quebec farms, making it the most cost-effective source of power currently in our portfolio and reducing our corporate wide average to below 4 cents/kwh,” Ben Gagnon, Chief Mining Officer of Bitfarms, said before adding:
“This low-cost power combined with the industry leading efficiency of the Bitmain S19j Pro means 6,200 miners in Washington could yield nearly 3.7 bitcoin per day at a cost of approximately US$4,000 per bitcoin when all miners are installed, based upon prevailing mining difficulty levels and costs. We are very excited to continue to complete strategic transactions that deliver significant value to our shareholders.”
At 4 cent per kilowatt this is competitive even with China back when bitcoin miners could operate there at an average cost of 5 cent/kwh.
The $4,000 cost to mine a bitcoin however sounds like a bit of an outlandish statement as our estimates during the peak of the bear in 2019 was some $6,000 to $9,000 when the hashrate was far lower.
That could perhaps be just the energy cost, but even at 1 cent and before the halvening or the huge jump in hashrate, lowest energy cost estimates were at about $3,000.
You have to add the cost of asics, and then the labour costs, the cost of the facilities, and you’d get to a total cost of production that is closer to the current price.
Bitfarms has been holding some of their coins however, profiting from the significant gains in its price this year.
The entity has now reached a market cap of close to $2 billion, up from a stock price of 0.80 cad in December 2020 to above 10 Canadian dollars.
They’re now expanding further, benefiting from the removal of some of their competitors in China, although bitcoin’s hashrate is now back to near all time high.
