TORONTO - Bitfarms Ltd. (NASDAQ/TSX: BITF), a significant player in Bitcoin data center operations, has announced an accelerated deployment of Bitcoin miners at a Pennsylvania site operated by Stronghold Digital Mining Hosting, LLC, a subsidiary of Stronghold Digital Mining, Inc. (NASDAQ: SDIG). The energization of the new mining hardware is expected in October 2024, two months ahead of the original schedule, which will contribute an additional 2.2 exahash per second (EH/s) to Bitfarms' capacity.
The hosting agreement, set to commence on October 1, 2024, will see Bitfarms deploying 10,000 Bitmain T21 miners at the Panther Creek site, initially slated for a December 2024 launch in Paraguay. This move is part of Bitfarms' strategy to optimize assets and control power costs, a significant expense in Bitcoin mining operations.
Ben Gagnon, CEO of Bitfarms, emphasized the importance of the agreement, stating it offers a "robust pathway to continued, profitable growth" and the potential for multi-year expansion. The partnership with Stronghold also provides Bitfarms with competitive power costs and access to high-performance computing and artificial intelligence opportunities.
Under the terms of the agreement, which runs through December 31, 2025, with automatic one-year renewals unless either party opts out, Bitfarms will compensate Stronghold with a monthly fee equivalent to fifty percent of the profit generated by the miners. Additionally, Bitfarms has deposited $7.8 million with Stronghold, estimated to cover three months of power costs for the operation, refundable at the end of the initial term.
The company reiterates its 2024 and 2025 guidance of achieving 21 EH/s and 35+ EH/s, respectively. Bitfarms, founded in 2017, operates 12 Bitcoin data centers across Canada, the United States, Paraguay, and Argentina, focusing on environmentally sustainable energy sources.
The information in this article is based on a press release statement from Bitfarms Ltd.
In other recent news, Riot Platforms (NASDAQ:RIOT) and Bitfarms have been in the spotlight due to a series of strategic moves and financial updates. Riot Platforms has been advocating for changes in Bitfarms' Board of Directors, citing governance issues. The company, a significant shareholder in Bitfarms, has influenced the resignation of two of Bitfarms' co-founders and has nominated new directors. Despite these changes, Riot insists further steps are needed, particularly ahead of the upcoming special meeting.
Riot Platforms has also increased its stake in Bitfarms to 18.9%, acquiring an additional one million common shares. This move comes amidst a backdrop of ongoing tensions between the two companies, following Riot's withdrawn unsolicited offer to acquire Bitfarms for $950 million. Bitfarms had rejected the offer, implementing a "poison pill" strategy in response.
Additionally, Bitfarms reported a decrease in its Q2 2024 revenue to $42 million and a net loss of $27 million. Despite these figures, the company remains optimistic about its expansion plans into high-performance computing and artificial intelligence sectors. Backed by a strong liquidity position of $195 million, Bitfarms is fully funded to achieve its exahash and petahash targets by 2024 and 2025 respectively, and is actively exploring growth opportunities in the United States. These recent developments reflect the strategic moves and financial performance of both Riot Platforms and Bitfarms in the competitive landscape of Bitcoin mining.
InvestingPro Insights
As Bitfarms Ltd. (NASDAQ/TSX: BITF) accelerates its Bitcoin mining operations, investors and industry observers are keenly watching the company's financial health and market performance. According to InvestingPro data, Bitfarms holds a market capitalization of approximately $922.89 million USD, reflecting its position in the cryptocurrency mining sector. The company's revenue growth over the last twelve months, as of Q2 2024, stands at a robust 37.27%, underscoring its expanding operations and potential for increased earnings.
Despite the absence of dividends for shareholders, Bitfarms has demonstrated a significant return over the last year, with a price total return of 85.45%. This suggests that the company's stock has been responsive to positive developments, such as the recent announcement of expedited miner deployment. However, the company's gross profit margin remains in the negative at -16.83%, indicating that it is currently not generating a profit from its revenues.
An InvestingPro Tip worth noting for Bitfarms is that analysts do not anticipate the company will be profitable this year, which may be reflected in its negative P/E ratio of -6.26. This could be a point of concern for potential investors looking for short-term profitability. Nevertheless, Bitfarms' liquid assets exceed its short-term obligations, providing a cushion against immediate financial pressures.
For those interested in a deeper dive into Bitfarms' financials and market performance, InvestingPro offers additional insights and tips. Currently, there are 14 more InvestingPro Tips available for Bitfarms at https://www.investing.com/pro/BITF, providing a comprehensive analysis for informed investment decisions.
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