Latest news with #blockreward
Coin Geek
11-07-2025
- Business
- Coin Geek
Bit Digital shifts from BTC mining to ETH staking
Getting your Trinity Audio player ready... In a bold move that signals a significant shift in the block reward mining landscape, Bit Digital, Inc. (NASDAQ: BTBT), a New York-based, Nasdaq-listed crypto firm with a market capitalization of $489 million, announced in May that it is exiting BTC mining entirely to focus on Ethereum (ETH) staking and treasury operations. This strategic pivot, driven by rising BTC mining costs, diminishing returns, and the allure of ETH's proof-of-stake (PoS) model, reflects broader industry trends toward sustainability and capital efficiency. The announcement, however, triggered a 4-8% drop in Bit Digital's stock price, highlighting investor uncertainty about the transition. As the company repositions itself, it aims to capitalize on ETH's growing institutional appeal and long-term yield potential, potentially reshaping its investor base and market position. Bit Digital's decision comes at a challenging time for BTC mining. The April 2024 BTC halving slashed block rewards from 6.25 to 3.125 BTC, significantly impacting miners' revenue. Compounding this, BTC mining difficulty reached an all-time high of 126.98 trillion in May 2025, driven by a 14-day average hashrate of 913.54 EH/s. Transaction fees, a critical revenue stream, dropped to just 1.3% of block rewards in May, falling below 1% in June. Bit Digital's Q1 2025 financials reflect this squeeze: BTC mining revenue plummeted 64% year-on-year to $7.8 million, with only 83.3 BTC mined, an 80% decline from the previous year. High energy costs and continuous hardware upgrades further eroded margins, making BTC mining increasingly unsustainable for the firm. 'Our first quarter results were affected by mark-to-market losses on digital assets and lower bitcoin mining revenue, both of which reflect industry-wide headwinds and the strategic rebalancing of our business. We continued to make meaningful progress in scaling our infrastructure platform and diversifying our revenue streams,' the company stated. In contrast, ETH's PoS mechanism, implemented after the 2022 Merge, offers a compelling alternative. Staking allows firms to lock up ETH to secure the network, earning annual yields of 4-6.5% with significantly lower energy consumption than BTC's energy-intensive proof-of-work (PoW) model. Bit Digital began building its ETH staking infrastructure in 2022, and by March 31, 2025, held 24,434.2 ETH valued at $44.6 million and 417.6 BTC worth $34.5 million. The company plans to gradually convert its BTC holdings into ETH, with proceeds from the sale or wind-down of its BTC mining operations—spanning facilities in the United States, Canada, and Iceland—reinvested into ETH staking. Additionally, Bit Digital announced a public offering of ordinary shares, led by B. Riley Securities, to fund further ETH purchases, though the offering's size and terms remain undisclosed. The pivot aligns with a broader shift in institutional capital toward ETH, driven by its staking yields and the liquidity provided by liquid staking derivatives (LSDs). The Ethereum Shapella upgrade in April 2023 enabled ETH withdrawals, boosting demand for LSDs like stETH, which allow staked assets to be traded or used as collateral in decentralized finance (DeFi). This mechanism enhances capital efficiency and lowers staking barriers, making ETH attractive to yield-focused investors. Bit Digital's move positions it as the third-largest publicly traded ETH holder, behind SharpLink Gaming (NASDAQ: SBET) and Coinbase (NASDAQ: COIN), with plans to increase its ETH reserves by over 18,000 ETH through BTC conversions. However, the transition is not without risks. Bit Digital's stock fell 3.7% on June 25, with an additional 4.3% drop in after-hours trading, reflecting investor concerns about short-term volatility. Legacy BTC mining investors may exit, and the firm's rapid cash burn, despite 52.44% revenue growth over the past year, raises questions about financial sustainability. The ETH/BTC ratio, down 75% since December 2021, suggests BTC's recent outperformance, adding uncertainty to Bit Digital's bet on ETH. Yet, growing interest in ETH exchange-traded funds (ETFs) and staking's stable returns could attract new institutional investors, particularly those prioritizing Web3-based income strategies. Bit Digital's pivot also coincides with its expansion into high-performance computing (HPC). Its subsidiary, WhiteFiber Inc., secured a $43.9 million financing facility from the Royal Bank of Canada to develop a Tier-3 artificial intelligence (AI) data center in Quebec, set for completion by Q4 2025. Additionally, WhiteFiber acquired a North Carolina property for a 24 MW AI data center campus and is preparing for a potential initial public offering (IPO). These moves diversify Bit Digital's portfolio, leveraging its computational expertise beyond crypto. 'This financing is a breakthrough for WhiteFiber and our sector,' said Bit Digital CEO Sam Tabar. 'No other company operating at the intersection of HPC Cloud and data centers has secured financing of this nature, to our knowledge. We believe that this is a strong endorsement of our business model, the quality of our assets, balance sheet, and ability to execute.' As BTC mining faces mounting pressures, Bit Digital's shift to ETH staking reflects a strategic response to industry challenges and opportunities. While the transition carries risks, it positions the firm to capitalize on ETH's growing role in the digital economy, potentially setting a precedent for other miners to follow. Watch: Unpacking Bitcoin sustainability at the London Blockchain Conference title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Coin Geek
27-06-2025
- Business
- Coin Geek
US pushes for 'crypto' ambition amid environmental crisis
Getting your Trinity Audio player ready... The United States has solidified its position as the global leader in block reward mining, commanding over 40% of the world's hash rate as of May 2025. The 2021 China's crypto ban drove miners to the United States, where affordable energy, supportive policies, and robust infrastructure create an ideal environment. States like Texas, Wyoming, and Georgia offer electricity rates as low as $0.08 per kilowatt-hour and business-friendly regulations, attracting major players like Riot Platforms (NASDAQ: RIOT) and Core Scientific (NASDAQ: CORZ). The Trump administration's pro-crypto stance has accelerated the digital mining industry's growth, with relaxed environmental regulations and streamlined permitting processes spurring the development of new mining facilities. Texas, with its deregulated energy market and abundant natural gas, is a prime destination for block reward mining. It hosts some of the largest operations globally, including Argo Blockchain (LSE: ARB), which acquired 320 acres of land in West Texas in 2021. However, the proposed 36% tariffs on imported mining equipment announced on April 2 threaten profitability by increasing operational costs. For the block reward mining sector, which heavily depends on imported hardware from Southeast Asia and China, these tariffs present immediate challenges and create a transformative opportunity. Energy availability remains a critical but challenging factor. While competitive rates provide an advantage, grid strain during peak demand periods can lead to outages or price spikes, disrupting operations. Miners are mitigating these risks by securing long-term energy contracts or investing in renewable sources like solar and wind, aligning with growing environmental concerns. Bitcoin mining's estimated 150 TWh annual consumption has drawn scrutiny from climate advocates, pushing the industry toward sustainable practices. Institutional investors, including firms like BlackRock (NASDAQ: BLK), are exploring stakes in mining companies, driving consolidation as larger players acquire smaller operations to boost efficiency. However, local communities, particularly in Texas, are resisting mining's environmental and noise impacts, with lawsuits over cooling fan noise escalating. In October 2024, Citizens Concerned About Wolf Hollow filed a lawsuit at the District Court for Hood County, accusing Marathon Digital (NASDAQ: MARA) of failing to reduce excessive noise pollution caused by its mining operations. These tensions could lead to stricter local regulations, challenging the industry's expansion. 'In such a short time, Bitcoin mining has completely altered our community, for the worse. The around-the-clock mining isn't just driving up our electricity bills — it's costing us our health. We feel trapped. Day and night, we are subjected to relentless noise that is physically harming us. We aren't asking for much — just for Marathon to take responsibility and restore our peace and well-being,' one Granbury resident said. The U.S.'s dominance in Bitcoin mining will likely persist, but miners must navigate tariff risks, energy volatility, and community concerns to maintain their global edge. Strategic adaptation and investment in sustainable practices will be key to sustaining leadership in this dynamic market. Watch: Bitcoin mining in 2025: Is it still worth it? title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen=""> Block Reward Mining Donald Trump Tariff Texas Trump Administration United States
Coin Geek
26-06-2025
- Business
- Coin Geek
Some block reward miners ditch AI for BTC; others ditch BTC for ETH
Getting your Trinity Audio player ready... Some prominent block reward miners are making major strategic transitions as they try to figure out how to turn an elusive profit from this sector. The BTC network's hash rate has seen a double-digit decline since mid-June, hitting lows not seen since March (and still falling). Theories behind this decline range from Israel's attacks on Iran—a country long rumored to have major mining operations—to the oppressive heatwave gripping the United States. The latter theory involves cost-conscious miners shutting down as electricity prices surge higher and/or local power grids paying miners to switch off their rigs so everyone else can switch on their air conditioning. As always, the answer may lie in a combination of factors, but BTC's recent price resurgence—after slipping below $100,000 for the first time in over a month—is definitely a welcome development. The current cost to mine a single BTC (the full cost, including depreciation of mining rigs) was over $102,000 as of June 23. Also, riding to BTC's rescue is an expected significant drop in the network difficulty level, which is adjusted every two weeks based on hash rate fluctuations. The next adjustment is scheduled for June 29, and current estimates expect a downward shift of up to 9%. That would be the biggest decline since China cracked down on domestic mining operators in 2021. However, competition remains fierce in finding the next block and collecting those rewards. On Tuesday, CleanSpark (NASDAQ: CLSK) announced that it had achieved its mid-year hash rate target of 50 EH/s. CleanSpark is just the second publicly traded miner to eclipse that barrier after MARA (NASDAQ: MARA) crossed that threshold last December. However, international rivals like Australia's IREN (NASDAQ: IREN) and China's Cango Inc (NYSE: CANG) are expected to hit their own 50 EH/s targets in the coming months. So CleanSpark CEO Zach Bradford says the new target is 60 EH/s 'and beyond.' CleanSpark operates over 30 sites across four U.S. states, branding itself as 'America's Bitcoin Miner.' Never enough money The cutthroat competition and precarious mining finances have left operators constantly seeking new capital (even if some are using that capital to buy additional tokens for their BTC treasuries). This week, Hut 8 (NASDAQ: HUT) announced that it had doubled its credit facility with the Coinbase (NASDAQ: COIN) digital asset exchange to $130 million. Hut 8 said the amended and expanded agreement would extend the debt's maturity date to July 2026 while imposing a fixed interest rate of 9%, down from the variable rate that ranged as high as 11.5% over the past 18 months. Hut 8 didn't say how it planned to use its new credit beyond 'near-term opportunities advancing through its growth.' In March, Hut 8 announced it had partnered with President Trump's sons to launch American Bitcoin Corp (ABTC), a new mining/BTC treasury operation comprising 'substantially all' of Hut 8's mining gear. In May, ABTC announced plans to go public on the Nasdaq sometime in Q3 via a merger with Gryphon Digital Mining. The following month, ABTC revealed that it had acquired 215 BTC for its treasury. But there's been no word on ABTC's mining performance since that March announcement. Other miners raising cash include IREN, which closed its upsized $550 million convertible notes offering earlier this month, netting the company just under $535 million. Around $146 million of that haul will go towards servicing future debt obligations, with the rest targeted for general corporate purposes and working capital. Other miners are taking different avenues to raise cash. Riot Platforms (NASDAQ: RIOT) announced earlier this month that it had sold nearly 1.75 million shares in rival Bitfarms (NASDAQ: BITF), earning Riot just under $1.6 million. Last year, Riot began acquiring major chunks of Bitfarms as part of a hostile takeover bid that sought to oust Bitfarms' directors. Riot acquired nearly 19% of Bitfarms before the companies reached a settlement last September, and Riot began selling off bits of Bitfarm. This latest sale brought Riot's stake down to 14.3%. Back to the top ↑ Bit Digital ditching BTC for ETH Bit Digital (NASDAQ: BTBT) announced earlier this week that it was shoring up its finances with a new C$60 million (US$44 million) credit agreement with the Royal Bank of Canada. The company said it would use the funds to expand its AI/high-performance computing (HPC) operations, which have taken precedence over its mining business. Bit Digital's mining revenue totaled $7.8 million in Q1, 31% of its total revenue, down from 72% in the same period last year. However, Bit Digital followed that news on Wednesday by announcing a major 'strategic shift,' saying it was looking to get out of the BTC mining business entirely. The company said it has 'commenced a strategic alternatives process for its bitcoin mining operations that is expected to result in their sale or wind-down.' Instead of BTC, Bit Digital will now focus on the Ethereum network's native token, ETH, with the goal of becoming 'a pure play [ETH] staking and treasury company.' Bit Digital will also 'over time' convert its current 417.6 BTC treasury to ETH, boosting the 24,434 ETH it already holds. Any net proceeds from the wind-down of its BTC mining operations will be similarly converted to ETH. To help grease these wheels, Bit Digital is commencing an underwritten public offering of its ordinary shares. Bit Digital didn't offer any specifics on the size or timing of this offering, nor even if the offering would actually take place. But the proceeds will be used to (wait for it) buy more ETH. In what was clearly a busy day at the Bit Digital offices, the company also announced plans to conduct an initial public offering of its wholly-owned HPC subsidiary WhiteFiber Inc. Here, too, specifics are short, as the company filed its IPO application with the U.S. Securities and Exchange Commission (SEC) on a confidential basis, allowing it to keep facts and figures under wraps for the time being. Back to the top ↑ Canaan ditching AI for BTC On June 23, miner Genesis Digital Assets (GDA) announced a deal with mining rig manufacturer Auradine to buy 1,000 of the latter's Teraflux AT2880-277 air-cooled units. The rigs will be installed at GDA's data center in Glasscock County, Texas, one of 20 locations GDA operates worldwide and part of GDA's U.S. expansion strategy. Auradine has become a more attractive option for U.S.-based miners due to the ongoing impact of President Trump's tariff war. The three largest rig-makers—Bitmain, Canaan Inc (NASDAQ: CAN), and MicroBT—are all foreign-based, and while they're making efforts to establish U.S. roots, ramping up manufacturing capacity is a slow and pricey process. Speaking of Canaan, the company just announced a 'strategic realignment' that will see it 'discontinue its non-core AI semiconductor business unit,' a process the company expects will take a few months to conclude. Going forward, Canaan will focus on 'sharpening its focus on its core businesses of bitcoin mining machine sales, self-mining operations, and consumer mining products.' Canaan's AI operations were a minor contributor to its bottom line, accounting for just $900,000 of its total 2024 revenue of $223.2 million. However, AI accounted for 15% of 2024's operating expenses, and Canaan believes mothballing the unit will result in significant savings. The move distinguishes Canaan from some prominent U.S. miners who have embraced the more predictable revenue streams from AI/HPC operations. Canaan CEO Nangeng Zhang said, 'doubling down on our core strengths in crypto infrastructure and bitcoin mining is the most strategic path forward.' Back to the top ↑ Tether seeks BTC mining crown Tether, the issuer of the market-leading USDT stablecoin, has been talking up its own mining operations for years now without offering specifics as to the success or failure of these operations. However, since May 2024, Tether has steadily increased its stake in Bitdeer (NASDAQ: BTDR) and held a 22.8% stake in Bitdeer as of this April. Earlier this month, Bitdeer announced that Tether had exercised its warrants from that 2024 financing deal, handing Tether another 5.2 million ordinary shares in exchange for $50 million. Tether held ~34 million Bitdeer shares in April, so the warrants represent a significant increase. During his appearance at the recent Bitcoin 2025 Conference in Las Vegas, Tether CEO Paolo Ardoino claimed that Tether had 'invested $2 billion in energy production and Bitcoin mining,' then said the total was actually greater than that. Either way, Ardoino boldly predicted that 'it is very realistic that, by the end of this year, Tether will be the biggest Bitcoin miner in the world, even including all the public companies.' Ardoino went on to suggest that Tether's interest in mining was both altruistic and selfish in that Tether claims to hold over 100,000 BTC and thus has an interest in the integrity of the network. Not long after that speech, Ardoino tweeted that Tether 'will work towards open-sourcing its Bitcoin Mining OS (MOS).' This will allegedly allow new mining companies to 'enter the game' without the need for third-party hosted software, and create 'an even playing field reducing the gap between publicly listed companies and smaller players.' This week, Ardoino went on The Block's Big Brain Podcast, where he repeated his claim of Tether having 100,000 BTC, saying the company needs to be 'part of the Bitcoin mining security team … to protect our own investment.' Ardoino again stated his belief that Tether 'will become the biggest Bitcoin miner out there.' Tether has long been criticized for making claims regarding its finances that require the public to take them at their word (even if that word sometimes proved fraudulent). Tether has also been accused of Photoshopping its logo onto shipping containers that Ardoino claimed contained some of Tether's mining rigs. Ardoino pushed back against these claims, arguing that while the logo was indeed added after the fact, it was only to preserve the 'physical privacy of the site.' Back to the top ↑ Norway says no way? Many countries around the world are dealing with strained electrical grids due to the heavy demands of local mining sites (both legal and illegal). Norway has sufficient energy to serve its citizens' needs, but on June 20, Minister of Digitalization and Public Administration Karianne Tung announced that the government 'has a clear intention to limit the mining of cryptocurrency in Norway as much as possible.' The government is exploring its authority under the energy allocation provisions of the Planning and Building Act to preserve power for other energy-intensive activities, including 'socially beneficial data centers.' This is by no means the first time Norway and Tung have expressed concern about mining's power consumption. Local residents have also expressed outrage over the excessive noise produced by mining sites. Tung said mining is 'very energy-intensive, and yields little in the local community in the form of jobs and income.' By limiting mining's access to local power, Norway 'can free up land, power and grid capacity for other uses that contribute more to value creation, jobs and cuts in greenhouse gas emissions.' Those 'other uses' include AI data centers 'that are a critical prerequisite for digitalization.' Tung also appeared to suggest the potential for a carveout for 'the useful use of blockchain technology,' although no specifics were offered. The government is still studying the matter but expects to come to a decision by 'autumn.' The proposed (temporary) ban appears to be aimed at prohibiting the launch of new mining operations and possibly grandfathering existing sites. These sites have been told to register their operations by July 1 to ensure the government has accurate data with which to make their conclusions. Back to the top ↑ Watch: Teranode is the digital backbone of Bitcoin title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Coin Geek
06-06-2025
- Business
- Coin Geek
Miners in tight spot as post-halving takes dent on revenue
Getting your Trinity Audio player ready... Block reward mining profitability is under severe pressure in 2025, driven by the 2024 Bitcoin halving and escalating energy costs. The halving slashed block rewards to 3.125 BTC, while global mining difficulty reached a record 123T, pushing the hash price to a low of $0.049 per terahash per second. For many miners, operational costs now exceed revenue, with some United States operations facing costs of up to $137,000 per Bitcoin—far above market prices of $100,00–$111,000. Energy costs, which can account for 80% of operational expenses, are the primary challenge. In regions like Oman, subsidized electricity rates of $0.035 per kilowatt-hour enable profitability, but miners in Europe or parts of North America face rates as high as $0.20 per kWh, rendering operations unsustainable without significant efficiency gains. Upgrading to advanced rigs like MicroBT's WhatsMiner M66S+ is a common strategy, but the high upfront cost—often exceeding $10,000 per unit—limits accessibility for smaller miners. Financial strain has forced drastic measures. Firms like Riot Platforms (NASDAQ: RIOT) sold $38.8M in BTC in December 2024 to cover expenses, reflecting a broader trend of liquidating reserves to stay afloat. Smaller miners, unable to absorb losses, are exiting the industry or being acquired by larger players like Marathon Digital (NASDAQ: MARA), which are scaling hash rates to offset reduced rewards through economies of scale. To mitigate losses, miners are diversifying revenue streams. Some are leasing excess computing power for artificial intelligence (AI) or cloud computing, leveraging existing infrastructure to generate stable income. Others are investing in renewable energy sources to lower costs, though scaling such solutions requires significant time and capital. The profitability crisis underscores the need for relentless innovation, as miners must balance immediate financial pressures with long-term strategies to remain viable in a hyper-competitive landscape. Watch | Bitcoin mining in 2025: Is it still worth it? title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen=""> Bitcoin Halving Bitcoin Price Block Reward Mining
