Bitfarms, one of the world’s largest publicly traded Bitcoin mining companies, has unveiled an ambitious $240 million plan to upgrade its mining hardware.
This is before the next Bitcoin halving event, scheduled to take place in April 2024. This strategic move aims to improve the company’s competitiveness and profitability in the face of the reduction in mining rewards caused by the halving.
Mass hardware purchase
Central to Bitfarms’ upgrade strategy is the purchase of 88,000 new, high-efficiency Bitcoin mining machines from leading manufacturers such as Bitmain. The company has acquired 35,888 Bitmain Bitcoin mining T21 devices and has the option to purchase an additional 28,000 T21 mining machines.
They will also acquire 19,280 Bitmain T21 mining machines, 3,888 Bitmain S21 Mining Machineand 740 Bitmain S21 hydraulic mining machines. Jeffrey Lucas, Chief Financial Officer of Bitfarms, said that this fleet transformation upgrade will completely change the rules of the game.
🗣️Jeff Lucas, #Bitfarms CFO: “Transformational fleet upgrades drive Bitfarms’ scale and profitability #bitcoin Halved. This is a game changer that triples our hash rate to 21 EH/s, increases our target operating capacity by 83% to 440 megawatts (MW), and…
— Bitfarms (@Bitfarms_io) April 3, 2024
This will give the company unprecedented scale and profitability in the post-halving mining industry. The expected impact of the new hardware includes increasing Bitfarms’ hash rate from 6.5 exahashes per second (EH/s) to an impressive 21 EH/s.
It will also increase the company’s target operating capacity by 83% to 440 megawatts (MW). Additionally, it is expected to increase the overall efficiency of Bitfarms’ mining fleet by 40%, reducing energy consumption to just 21 Watts per terahash (W/TH).
Bitfarms is financially positioned to successfully execute this ambitious upgrade plan. As of March 31, 2024, the company held $66 million in cash reserves and a Bitcoin (BTC) vault worth approximately $56.7 million, including 806 BTC valued at $70,400 per coin.
Liquidity totaling $123 million provides Bitfarms with a solid financial cushion to facilitate hardware acquisitions and related infrastructure investments.
Operating trends and reinvestment
The company’s recent operating data highlights the need for Bitfarms to upgrade its strategy. March 2024, Bitfarms mined 286 BTC, the monthly operating computing power is 6.5 EH/s.
However, in the same month a year ago (March 2023), the company mined 424 BTC with a lower hash rate of 4.8 EH/s.
Despite higher hash rates, the year-over-year decline in Bitcoin production highlights the increasing difficulty of the mining process and the importance of expanding production capacity to maintain profitability.
To fund its growth plans, Bitfarms sold nearly all the Bitcoin it mined over the past two months and reinvested the proceeds in expanding its mining fleet.
The Bitcoin halving is expected to occur in 2024, and the reward for mining a new block will be reduced from 6.25 BTC to 3.125 BTC. The 50% reduction in mining rewards is a recurring event designed to control the supply and inflation rate of Bitcoin.
However, this also creates significant challenges for miners, as their earning potential is cut in half. Bitfarms’ $240 million mining upgrade is a strategic move designed to offset the impact of the halving by significantly increasing the company’s computing power and overall operational efficiency.
Bitfarms CFO Jeffrey Lucas is confident in the company’s ability to successfully execute the upgrade.
“The success of our upgrade program depends on our demonstrated ability to leverage our operational expertise to deliver industry-leading performance and profitability,”
He said.
Notably, Bitfarms’ track record and operational expertise in the Bitcoin mining industry positions it to successfully achieve its near-term goals. Therefore, it can respond to the challenges posed by the halving and take advantage of the opportunities presented by the growing cryptocurrency mining industry.
