The Galaxy CEO appears unfazed by this year’s carnage in the BTC mining sector, stating that the company plans to significantly increase its mining initiatives.
Galaxy Digital Holdings CEO Mike Novogratz described the Helios mining transaction as a “transformative acquisition” for the company as it seeks to expand its exposure to the Bitcoin mining sector.
The crypto investment firm announced the $65 million acquisition of Argo Blockchain’s flagship mining facility on December 28 as part of Argo’s drastic action to avoid bankruptcy.
In a tweet about the deal on December 29, Novogratz stated that Galaxy is a “strong believer” in Bitcoin’s long-term future and that the company will continue to ramp up its mining initiatives:
“Bear markets are for construction. We are long-term supporters of BTC and believe that the lowest-cost miners will triumph over time. Helios is a game changer that will broaden our mining capabilities and services as we continue to build for a decentralized future.”
The Galaxy CEO went on to explain that the company has a specific “thesis” on how to approach the mining sector: “low-cost electricity, a very efficient team,” and “buying ASIC miners cheap.”
“That’s a recipe for mining success, even as the hash rate rises,” he said.
According to Hashrate Index, Bitcoin ASIC miner prices are at a low not seen since at least 2021, with the most efficient ASIC miners seeing their prices fall 86.8% from their peak in May 2021.
Galaxy has five business lines: trading, asset management, cryptocurrency mining, venture capital, and investment banking. According to its website, it currently manages assets worth $1.9 billion.
As of now, Galaxy has primarily used hosting services for its mining operations. However, Novogratz points out that Helios’ 200 megawatt (MW) capacity will allow the company to not only run miners on its own site, but also host for others.
Helios has the potential to scale to become one of the largest miners on the market. Argo Blockchain previously stated in May of this year that it intended to expand its electrical capacity to 800MW in the “coming years.”
At the time, Helios said it expected to reach a BTC mining capacity of 5.5 exahashes per second by the end of the year, with the potential to reach 20 EH/s in the future.
Galaxy appears to have some cash to burn during the 2022 bear market, as it also provided Argo Blockchain with a $35 million equipment finance loan as part of the acquisition.
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