The agreement comes at a time when Bitcoin miners’ profits have fallen significantly since the April halving.
Leading Bitcoin miner Hut 8 has secured a power purchase agreement for a site in West Texas, a major milestone following the April halving. The agreement gives the mining company access to 205 megawatts of power capacity, which is potentially available for immediate use.
The transaction is part of Hut 8’s massive development pipeline, which includes 1,100 megawatts of exclusive energy capacity.
The mining site is cleverly located near a wind farm and is connected to the ERCOT grid. As a result, Hut 8 has access to some of the cheapest wholesale electricity in North America, which will fuel Bitcoin mining and AI projects. In particular, the mining company has already begun engineering, procurement, and construction of data centers to utilize this new power source.
According to an official press release, this is the first of its kind to be approved for such a large data center load under a complex regulatory framework. Asher Genut, CEO of the mining company, commented on the development:
“(The purchase approval) is a testament to the expertise, diligence and creativity of our corporate development organization in negotiating a bespoke structure to address the nuanced commercial, legal and regulatory challenges of each stakeholder in the project.”
Upon completion of the transaction, Hut 8 will have approximately 1.3 gigawatts of total capacity through its own and managed services.
Cabin 8 Expansion
The agreement comes at a time when Bitcoin miners’ profits have fallen significantly since the April halving. However, public miners with solid balance sheets like Hut 8 are taking advantage of the market share opportunity as less efficient miners exit the industry. Genoot expressed optimism about the future, saying:
“We continue to look for opportunities to work with our energy partners to develop tailored structures that create tremendous value for all parties involved.”
In June, Hut 8 secured $150 million from tech investment platform Coatue to help build its AI infrastructure. The company plans to commercialize its AI verticals, with revenue expected in the second half of 2024.
Hut 8’s stock rose 6% on Monday to close at $17.48 and is currently up 2% in premarket trading. The stock has risen 65% over the past month amid the company’s continued expansion.
Texas: Mining Hub
Texas has quickly emerged as a hub for Bitcoin miners, especially since China banned mining operations in 2021. Major mining companies, including Marathon Digital and Riot Blockchain, have expanded their operations in the area in recent years.
Hut 8’s latest power purchase agreement in West Texas is a major step forward for the company as it continues to grow amid challenging market conditions.
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