Soaring Bitcoin Price Boosts Fortunes of Cryptocurrency Mining Firms
A Compute North modular data center housing bitcoin mining infrastructure. (Photo: Compute North)
The soaring price of bitcoin has boosted the fortunes of the cryptocurrency mining industry, which is seeing record profits amid surging investor interest in digital assets. The infrastructure to support bitcoin mining has scaled up in low-cost facilities outside the traditional data center industry, supported by a sophisticated financial ecosystem.
The value of bitcoin has set record highs in recent weeks, moving from $10,000 in September to a peak of $42,000 last week before settling at around $35,000 today. Miner revenue has soared along with the price of bitcoin, boosting the share prices of publicly-held mining firms and triggering large orders for new capacity.
Public mining company Marathon Patent Group today announced plans to raise $250 million through a direct stock offering, and plans to use the proceeds to buy new mining computers and expand the company’s infrastructure.
Another example is today’s announcement that cryptocurrency colocation specialist Compute North will partner with Foundry Digital to add 47 megawatts of bitcoin mining capacity at its facilities in the United States. The companies say their target clients are institutional investors seeking to acquire bitcoin, which is actively traded as a commodity in the United States, as well as serving as a global digital currency for transactions.
Compute North offers large-scale facilities in industrial facilities in Texas and South Dakota, as well as a Nebraska site where it deploys containerized data modules. Foundry is part of Digital Currency Group, a financial services company focused on cryptocurrency, and specializes in financing and staking bitcoin mining operations.
“This partnership will further strengthen our relationship as we make bitcoin mining more accessible to institutional investors and businesses in North America,” said Mike Colyer, CEO of Foundry. “We have been hosting mining devices with Compute North for more than one year now and it is one of our preferred hosting providers for our clients.”
Improved Pricing & Profits Drive Miner Growth
The demand for more infrastructure is driven by the improved profitability for mining operations as the price of bitcoin has climbed. The return on a terahash per second (TH/s) of computing power has improved from 7.8 cents in October to 28.4 cents last week, according to Coindesk. As a result, the total hashrate (computing power) of the bitcoin network this week surged to a record 150 TH/s, up from 105 TH/s at this time last year.
Foundry helps mining operations buy hardware for bitcoin mining, which usually uses specialized semiconductors known as ASICs (Application Specific Integrated Circuits). In the Compute North partnership, Foundry will acquire 14,000 MicroBT Whatsminer mining devices, with half owned by Foundry and being housed at Compute North facilities. The other half…