Despite a significant drop in Bitcoin mining profitability over the past year, some mining companies are defying the odds by expanding their operations. CleanSpark, an American Bitcoin mining firm, recently announced the purchase of 12,500 Antminer S19 XP units at a price lower than the market average. This move comes as Bitcoin’s difficulty reaches record levels, placing additional pressure on miners. CleanSpark’s strategic investment aims to boost its mining capacity and exceed its year-end target.
CleanSpark’s Strategic Purchase:
CleanSpark, an American Bitcoin mining company, made headlines on June 1, acquiring 12,500 brand-new Antminer S19 XP units for $40.5 million. The purchase price of $23 per terahash per second (TH/s) was lower than the prevailing market rate. These high-performance mining machines offer a hash rate of 141 TH/s. With this purchase, CleanSpark’s total hash rate will increase by 1.76 exahashes per second (EH/s), supplementing its current capacity of 6.7 EH/s. Zach Bradford, CEO of CleanSpark, expressed confidence that this acquisition would enable them to surpass their year-end target of 16 EH/s.
The Bitcoin mining industry faces several challenges, including declining profitability and increasing mining difficulty. CleanSpark’s expansion plans demonstrate their determination to overcome these hurdles. Despite a 44% decline in mining profitability over the past year, the company has continued expanding its operations. According to Hashrate Index, mining profitability has plummeted to $0.071 per TH/s per day, marking an 82% decline since the peak of the crypto market in late 2021.
CleanSpark’s Steady Growth:
CleanSpark’s recent purchase of Antminer S19 XP units is not their first foray into expanding their mining fleet. In February, the company acquired 20,000 Antminer S19j Pro+ units and an additional 45,000 S19 XP ASIC rigs in April. These strategic investments highlight CleanSpark’s commitment to capitalizing on the potential of Bitcoin mining, despite the prevailing market challenges.
Success Stories in the Mining Industry:
CleanSpark is not the only company achieving success amidst difficult market conditions. Bitfarms, another prominent player in the industry, reported mining 459 BTC in May, reflecting a 6.5% increase compared to the previous year. However, Chief Mining Officer Ben Gagnon noted that a 47% increase in hash rate was offset by a 65% rise in network difficulty during the same period. Similarly, Cipher Mining achieved record production in May, mining 493 BTC. These impressive results were driven by a surge in transaction fees during the BRC-20 memecoin minting craze in early May.
Expansion Plans and Collaborations:
In addition to CleanSpark’s expansion, other mining companies are also taking steps to enhance their operations. Compass Mining recently announced a partnership with hosting provider Arthur Mining, facilitating the opening of a new mining facility in Ohio. Such collaborations and facility expansions indicate the industry’s resilience and determination to adapt to the evolving market conditions.
CleanSpark’s recent purchase of Antminer S19 XP units showcases its commitment to expanding its Bitcoin mining operations despite declining profitability. The strategic investment positions the company to exceed its year-end target and adapt to the challenges posed by increasing mining difficulty. Other success stories in the mining industry illustrate the sector’s ability to overcome obstacles and capitalize on favorable market conditions. As companies continue to innovate and collaborate, the Bitcoin mining industry remains resilient and poised for future growth.