360 Mining, a bitcoin miner, raised $2.25 million in a new funding round and intends to use the funds to increase natural gas production and mining capacity.
Luxor, a Bitcoin mining software company, revealed the company’s plans, saying it is participating in the funding round alongside BT Growth Capital.
In October 2021, 360 Mining raised $6 million in a seed round. The company is increasing production at a time when some of the largest Bitcoin miners are having difficulty paying their bills. Miner profits have been squeezed as the value of bitcoin has fallen, combined with high spot energy prices and increased mining difficulty.
360 Mining currently runs a 2-megawatt capacity site in Texas, with a hash rate of 45 PH/s. According to CEO Chris Alfano over Telegram, the new funds will allow it to increase gas production eightfold. He expects to add 90 PH/s by the first quarter of 2023.
“We expect to replicate our model on larger gas assets that we can acquire throughout 2023,” Alfano said, adding that the company’s capacity will reach 50 megawatts by the end of next year.
Being fully integrated is an important part of the company’s strategy to “thrive in turbulent markets,” according to the CEO.
Luxor said in a statement, “By owning the underlying energy resource, 360 Mining is able to adapt and remain profitable in turbulent markets by monetizing produced gas across three uncorrelated markets.” Bitcoin mining, traditional gas sales, and electricity sales are among them.
Access to low-cost energy has become critical for survival, and the use of stranded gas by companies such as Crusoe has gained traction.
360 Mining’s natural gas, on the other hand, is not stranded — for a variety of reasons. First, it “provides a revenue stream uncorrelated to BTC,” giving Alfano more balance-sheet flexibility. Second, it enables greater gas volumes in a single location, resulting in greater scalability.
“Finding stranded gas is difficult; finding large volumes of stranded gas is like looking for a needle in a haystack,” he added.