Hut 8 Corp., one of the leading Bitcoin mining companies in North America and the world, will close one of its mining farms located in Drumheller, Alberta, Canada. The objective of the decision is to optimize your operating costs in the face of high energy costs and voltage problems.
From now on, Drumheller will no longer function as a Bitcoin mining site. But Hut 8 won't completely divest its capital there; Efficient miners will be moved to the Medicine Hat site, also in Alberta, while old, inefficient equipment will be taken out of service.
On the other hand, despite the closure, Hut 8 will maintain the lease on the Drumheller site, with the option to reactivate the site under more favorable market conditions in the future. In addition to the aforementioned increase in expenses, it should also be noted that Bitcoin mining rewards will be halved in April, when the fourth halving scheduled by the network protocol occurs.
As of February 2024, the total hashrate of Hut 8 reaches 7.24 EH/s, which represents 1.25% of the total Bitcoin network. After the disconnection of the Drumheller plant, the hashrate will be reduced to 6.45 EH/s. The amount of bitcoins (BTC) mined could go from 40.33 BTC/EH/s to 44.65 BTC/EH/s, an improvement of 11%.
March 2021 photo of the Hut 8 farm in Drumheller, Canada. Source X @Hut8Corp.
Asher Genoot, CEO of Hut 8, explained that this move is part of a comprehensive restructuring plan to maximize the value of the company's assets and position it for profitable growth. Company officials hope that the relocation of efficient miners and the retirement of less efficient ones will improve Hut 8's cash flow, reduce the costs of its mining operations and increase the number of bitcoins (BTC) mined by EH, as stated. he said previously.
The announcement regarding the plant in Drumheller has to do with other similar actions by Hut 8, a company that plans to use 9,000 BTC from its balance sheet to finance the construction of a new 63 megawatt (MW) site in Culberson, Texas, United States . The total estimated cost of the new site would be USD 17.3 million for construction, so the company would not have to spend all of its 9,116 BTC on its balance sheet.
Other companies dedicated to Bitcoin mining are carrying out similar strategies. HIVE Digital, for example, acquired 1,000 Antminers S21 from Bitmain to upgrade its fleet in preparation for the halving . They seek to have more efficient teams and, in this way, remain competitive in the near future. Hive, which has a hashrate of approximately 4.15 EH/s, hopes to reach 5.5 EH/s with the new acquisitions.
Finally, the Argo Blockchain is also reconfigured. In this case, Argo sold a mining farm to reduce its outstanding debt to Galaxy Digital, a loan and asset management firm. This is the Mirabel facility in Quebec, Canada, for USD 6.1 million, with an electrical capacity of 5 megawatts (MW). The company will move Mirabel miners to its farm in Baie Comeau, Quebec, while liquidating older miners representing 140 PH/s.
Of the proceeds earned, Argo used $4 million to pay off debt to Galaxy Digital, reducing its outstanding balance to $14 million at the end of February. However, Argo still has $40 million in senior notes outstanding with an interest rate of 8.75%. That's why, like other companies in the sector, it is taking steps for a future of less rewards income in less than 50 days.
