Key Takeaways
- CleanSpark purchased 60,000 Bitmain S21 units at $16.10 per terahash for $193.2 million.
- Miner has option to acquire an extra 100,000 miners at a fixed rate of $18 per terahash over the next 12 months
United States-based Bitcoin miner CleanSpark Inc. is set to significantly boost its mining capabilities, with plans to purchase up to 160,000 Bitmain S21 miners by the end of 2024, according to a recent announcement on January 8th.
The move is expected to catapult CleanSpark’s hashrate from its current 10 exahashes per second (EH/s) to an impressive 50 EH/s over the coming year, positioning it as the third-largest public Bitcoin mining company by hashrate.
The strategic agreement involves an initial investment of $193.2 million for 60,000 Bitmain S21 units, with delivery scheduled between April and June 2024. Additionally, CleanSpark has the option to acquire an extra 100,000 miners at a fixed rate of $18 per terahash over the next 12 months, serving as a hedge against potential price fluctuations post the Bitcoin halving event.
The Bitcoin mining sector has been gearing up for the impending halving, with CleanSpark’s move reflecting a broader industry trend. CleanSpark CEO Zach Bradford emphasized that the purchase is not just about growth but is a strategic decision to ensure operational efficiency and seize market opportunities. Bradford stated, “This is more than growth; it’s about ensuring operational efficiency and embracing market opportunities.”
The company’s commitment to sustainability is evident in its operations, primarily powered by low-carbon power sources. The focus on sustainability aligns with a broader industry shift towards environmentally friendly and energy-efficient mining practices.
Miners, including CleanSpark, have long factored the halving into their projections, preparing for its impact on mining rewards and profitability. Operational efficiency and securing economic incentives are key considerations in this preparation, particularly for smaller miners facing higher operational costs and less efficient equipment.
The potential impact of the halving depends on Bitcoin’s market price. A higher Bitcoin price can offset reduced block rewards, sustaining or increasing overall mining profitability. Conversely, a lower price may lead to challenges for some miners, potentially resulting in a temporary dip in the network’s mining difficulty.
CleanSpark’s strategic call option is seen as a prudent move to hedge against rising machine prices in bull markets. Bradford highlighted the company’s readiness to expand into the next bull market without concerns about increased machine costs.
Other major players in the Bitcoin mining space, such as Marathon Digital Holdings, Riot Platforms, and Cipher Mining, have also increased their machine holdings in preparation for the upcoming Bitcoin halving event expected in April. CleanSpark’s recent announcement follows its plans to launch an in-house trading desk in 2024, aiming to maximize returns from its growing Bitcoin holdings, which increased to 3,002 BTC in December.
