Whilst the Bitcoin mining difficulty did not materially change during January, the challenging weather conditions and reduction in Bitcoin block transaction fees saw monthly production drop by an average of 20% for the North American publicly listed miners. Throughout this article when reduction is mentioned, please keep in mind the above mentioned curtailment and drop in block transaction fees. The price of Bitcoin closed higher, at $42,582, on January 31, 2024, an increase of 0.7% on the closing price for December 2023.

Bitcoin Spot ETF finally approved

After 10 years of waiting, the Securities and Exchange Commission (SEC) finally approved a number of Bitcoin spot ETF investment funds from some of the largest investment banks in the world, including Blackrock and Fidelity. These funds in the past month have already accumulated a total, exceeding 200,000 Bitcoin, representing over 1% of the total available.  This news has seen the Bitcoin price rally above $48,000, providing the Bitcoin miners much needed revenues to cover their operational and capital expansion plans as they approach the next ‘halving,’ in less than 10 weeks time.

Change of Leadership at Hut 8 Corp (HUT)

On February 7th, 2023, Hut 8 announced the appointment of Asher Genoot as Chief Executive Officer. Asher succeeds Jaime Leverton, who had led the company for the last 3 years, and successfully completed the largest merger between two Bitcoin mining companies to date. The Board decided on a leadership transition post-merger with US Bitcoin Corp to set a new strategic direction. The new CEO affirmed commitment to exceeding expectations, focusing on growth, profitability, and shareholder value, while ensuring a smooth transition.

Bitdeer (BTDR)

Bitdeer produced 330 Bitcoin during the month, at an average rate of 10.6 Bitcoin per day, a reduction of 24% on the average daily rate achieved during December. The reduction in transaction fees accounted for a large proportion, and also as a result of a temporary curtailment of power at the Company’s mining facilities in Bhutan due to a seasonal increase in electricity costs during the month.

The Company anticipates initiating land preparation for the construction of a 221MW data center, referred to as the “Ohio Data center,” located in Ohio, United States, in February 2024. Land acquisition and securing power resources necessary for the center were accomplished in 2023, with completion of construction forecasted for 2025.

Bit Digital (BTBT)

Bit Digital mined 145.7 Bitcoin during the month of January, at an average daily rate of 4.7 Bitcoin per day, a reduction of 14% on the average daily rate achieved in the previous month.  This reduction is due to the level of transaction fees being significantly lower in January than in December. This reduction was also offset by the higher utilization (96%) achieved during the month.

The company sold 49 Bitcoin during the month which represents 34% of the production and increased their ”Hodl” to 739.2 Bitcoin with a further 18,072.2 Ethereum in their treasury. This brings their  total crypto valuation to approximately $74 million, with an additional $22.6 million in cash as of January 31, 2024.  Along with zero debt, this provides the company with a good balance sheet position, ten weeks away from the next halving.

As of January 23, 2024, the Company had 192 servers deployed, generating revenue in accordance with its Bit Digital High Performance Computing (HPC) contract. An additional 60 servers commenced revenue generation on February 4, 2024. The Company’s unaudited revenue from this contract for January 2024 is estimated at $1.0 million, with a forecast to achieve $50 million in the first full year of a three year agreement.

Bitfarms (BITF)

Bitfarms reported that its January mining operations produced 357 Bitcoin at an average of 11.5 Bitcoin per day which is a 20% reduction on the daily rate achieved in December. This reduction reflects a seasonal weather induced curtailment and a return to normal transaction fees compared to the temporary spike seen in December 2023. Nonetheless it was a good month of production with only SATO Technologies producing more per operational hash rate, during the month.

The fleet upgrade began with the shipment of the first batch of 11,600 Bitmain T21 miners to Quebec in February. Concurrently, construction of air-cooled warehouses and installation of 1,920 MicroBT M53S+ hydro-cooled miners and containers at Paso Pe are scheduled for February and March. Bitfarms expects to commence production at the Paso Pe farm by late Q1 2024. These initiatives, coupled with fleet upgrades throughout the first half of 2024, are anticipated to drive significant increases in hashrate and energy efficiency.

Bitfarms is pursuing an ambitious growth strategy aiming for a hash rate of 12 EH/s in the first half of the year and a total of 21 EH/s in the second half of the year. President and CEO Geoff Morphy highlighted the pivotal role of the new farm development in Paraguay in driving this growth.

Key milestones achieved in January include land acquisition for a 100 MW facility in Yguazu and the shipment of the main transformer for Paso Pe, keeping expansion projects on schedule. This strategic expansion and fleet upgrade aim to position Bitfarms as a market leader and a low-cost producer during the anticipated industry inflection point of the Halving year.

The company maintained its ”Hodl” of 804 Bitcoin, valued at $34.2 million, by selling 100% of its January production.  As of January 31, 2024, the company held Synthetic HODL’™ of 135 long-dated BTC call options. Furthermore, it successfully decreased its total outstanding debt by a further $2.0 million throughout the month, leaving a remaining balance of $2.0 million as of January 31, 2024, due to be entirely repaid in February 2024.

CleanSpark (CLSK)

CleanSpark produced 577 Bitcoin in January, at an average daily rate of 18.6 per day, a reduction of 19.9% on the daily rate achieved in the previous month. The company sold 6.4 Bitcoin, representing just 1% of their monthly production, during the month and chose to increase their ”Hodl” to 3,573 Bitcoin, currently valued at $152.1 million as at January 31, 2024.

The company announced energization has already commenced at the Sandersville expansion with approximately 4.6 EH/s of machines fully operational by mid-month, and at the the time of writing the operational hash rate has now reached 14 EH/s. Additionally, permitting is underway to double the hashrate at the Dalton campus to 1.6 EH/s. CleanSpark has a unique partnership with the City of Dalton, which owns and operates its own utility. Under this arrangement, the company is compensated to function as the city’s sole interruptible load during emergency power needs. This partnership exemplifies innovative collaboration between bitcoin miners and utilities to enhance grid performance, even within regulated markets like Georgia.

CleanSpark announced, on February 6th, the acquisition of three bitcoin mining facilities in Mississippi for $19.8 million, targeting 2.4 EH/s, with a further deal to acquire a third mining facility in Dalton, GA, for $3.4 million, expected to operate at 0.8 EH/s by April 2024.

With the increased expansion of 0.8 EH/s in Dalton and the Sandersville expansion, CleanSpark aims to exceed 20 EH/s by Q1 2024, with a further order of 12 EH/s of miners due to arrive in the second half of 2024 taking their end of year growth strategy to 32 EH/s.

On February 8th the company announced their Q1 2024 earnings with total revenues of $73.8 million, net income of $25.9 million and Adjusted EBITDA of $69.1 million. The accounts were also able to include a ‘Gain on fair value of bitcoin’ of $36 million The Financial Accounting Standards Board (FASB) has finalized new guidance that will transform GAAP accounting for certain crypto assets.

The Financial Accounting Standards Board (FASB) has finalized new guidance that will transform GAAP accounting for certain crypto assets, requiring fair value and bringing greater transparency to the accounting for those crypto assets.

DMG Blockchain (DMGI)

DMG Blockchain mined 53.5 Bitcoin during the month of January at an average daily rate of 1.7 Bitcoin per day, a drop of 25.8% on the daily rate achieved during December. The reduction in transactional fees and a 3.5-day substation outage, adversely affecting the month’s mining performance.

Despite this setback, the company is actively striving to align its fleet’s operations with its designated nameplate hashrate of 1.2 EH/s. The company sold 41 Bitcoin representing 76% of the production and increased their ”Hodl” to 468 Bitcoin with a valuation of $19.9m as at January 31, 2024.

Hive Digital (HIVE)

Hive Digital produced 234.6 Bitcoin, at an average daily rate of 7.6 Bitcoin per day, a reduction of 17% on the average daily amount produced in December. The company mines Bitcoin using renewable energy from geothermal and hydroelectric sources in Sweden, a location where the company hedges energy costs, Iceland, and Canada. The recent cold weather has required a brief curtailment of electricity and the grid-balancing software performed well.

The company did not sell any of the January production, choosing to add the entire amount to its current Bitcoin ”Hodl”, now totalling 1,939, valued at $82.6 million. Hive Digital constantly appears in the top three in the majority of Bitcoin mining metrics. January was no exception, the company finished 3rd in terms of Bitcoin per EH/s, Revenues per PH/s and Utilization.

Hive Digital announced the successful receipt and installation of their January batch of Bitmain S21 Antminers, renowned as the most advanced machines available, operating at 200 TH/s and an efficiency rating of 17.5 J/TH. The company has acquired 7,000 machines, totaling 1.4 EH/s in mining capacity and expects them to be installed by month-end.

Hut 8 Corp (HUT)

Hut 8 produced 339 Bitcoin from their self mining operations during the month of January, at an average daily rate of 10.9 Bitcoin per day which is a reduction of 25.2% on the daily average achieved in January. As well as the reduction in transaction fees, production was also affected by the severe weather events in both Texas and Alberta which were powered down temporarily to help support the grid.

The company sold 418 Bitcoin representing 123% of the monthly production to cover operational and capital costs.

On February 2, 2024, Hut 8 announced it had finalized an agreement with Marathon Digital, the new owners of two of its managed services sites; Charlie site in Kearney, Nebraska, and the Delta site in Granbury, Texas. As part of the deal, the company will continue to provide managed services at both sites until April 30, 2024, for which they will also receive a termination payment of $13,568,000, paid within 30 days of the termination date.

Hut 8 has also signed a four-year pact with Ionic Digital to oversee operations at four Midland, Texas sites and manage the Cedarvale site’s development in Ward County, Texas, slated for 240 MW. The company will also host 8,500 Ionic miners in New York. The agreement encompasses design, construction, and operational management, targeting 127,000 miners and 12 EH/s hash rate, for which it expects to receive $81.5 million cash payments, with potential increases upon meeting milestones. Additionally, Hut 8 gains equity interests in Ionic Digital and board representation.

Iris Energy (IREN)

Iris Energy mined 341 Bitcoin during the month of January, at an average daily rate of 11 Bitcoin per day, a reduction of 14.5% on the average daily achieved in the previous month..  This reduction was slightly offset by the positive news that they had reached a new hash rate high of 6.2 EH/s. The company also operated its energy strategy at the Childress site, achieving a $100,000, equivalent to 3 Bitcoin.

Iris Energy has provided updates on its expansion plans, over the last few weeks, aiming to reach 10 EH/s in the near term and 20 EH/s by 2024. On January 16, 2024, the Company announced a deal with Bitmain for 10 EH/s of new T21 miners in 2024 at a fixed rate of $14TH/s. This comprises 1 EH/s of direct miner purchases and options for 9 EH/s exercisable in H2 2024. If all options are exercised, fleet efficiency for 20 EH/s would improve to 21.9 J/TH, bringing down the cost to mine a Bitcoin considerably post the halving, due to occur in April.

On February 8th, Iris Energy announced the initiation of their GPU cloud services with leading AI company, Poolside AI SAS, featuring a contract for 248 Nvidia H100 GPUs. The agreement spans an initial 3-month term with an optional extension, reflecting the company’s commitment to flexibility. The service, launched on February 5, 2024, underscores their ability to meet stringent testing requirements and foster strategic partnerships.

Marathon Digital (MARA)

In December 2023, Marathon Digital had a record breaking month, in terms of every mining metric, producing a record Bitcoin mined for a North American listed miner. There was certainly a renewed expectation that the company had finally managed to turn around some of the challenges faced over the previous few years.

January proved to be another step back for the company, which saw a bigger than anticipated drop in production, despite increasing their installed hash rate by a further 2.3 EH/s to 26.9 EH/s (+9.3%).

The company announced production of 1,084 Bitcoin in the month, at an average daily rate of 35 Bitcoin per day, a drop of 41.5% on the average rate per day, achieved in December 2023.  This reduction was due to a number of significant issues, including the reduction of total network rewards by 14%.

Weather conditions also affected  the level of utilization at a number of their sites, but the largest impact to their production during the month, was a power outage at their Ellendale data center, managed by Applied Digital (APLD), on January 18,  which then escalated to a complete outage by January 19, 2024. The issue, due to electrical upgrades, will now materially impact revenues during February too and although the site management team cannot determine when, they anticipate the facility to be back online during February. The site currently hosts a total of 7.8 EH/s, representing 29% of Marathon Digital’s current total installed hash rate.

On a more positive note, Marathon Digital successfully finalized the construction and energization of their 250-megawatt joint venture in Abu Dhabi, boasting cutting-edge immersion technology deployments with nearly flawless uptime. Simultaneously, progress persisted with their joint venture in Paraguay, with 2,100 miners, or 0.3 EH/s, currently operational. They remain on track to achieve the full 1.1 EH/s online by Q2 2024. With further mining machine orders of 7.0 EH/s, the company has a robust plan to increase their current hash rate by a further 30% during 2024 and expect to reach a target of 50 EH/s by the end of 2025.

Marathon Digital did not sell any of their January production, increasing their Bitcoin ”Hodl” to a total of 15.741 Bitcoin. In addition they held $318.9 million in unrestricted cash. On January 31, 2024, combined unrestricted cash and bitcoin totaled an impressive $988.7 million. The acquisition of two sites from Generate Capital closed for $178.6 million cash on January 12, 2024.

Riot Platforms (RIOT)

Riot Platforms produced 520 Bitcoin during the month of January at an average daily rate of 16.8 Bitcoin per day, a drop of 16% on the daily rate achieved during December. As well as the reduction in transaction fees, production was affected by the severe cold weather in Texas, which drove up the domestic power demand. However, as a benefit, the company’s power curtailment initiatives stabilized the grid, yielding $3.3 million in power and demand response credits, roughly equivalent to 77 Bitcoin.

In June 2023, Riot Platforms inked a long-term deal with MicroBT, ordering 33,280 Bitcoin miners initially for Corsicana. By December 1, 2023, a second order for 66,560 miners was made under the same agreement. Together, these orders will boost Riot’s capacity by 26 EH/s. Deployment is set to commence in Q1 2024, targeting completion by the latter half of 2025. Riot Platforms expects to achieve a self-mining hash rate capacity of 29 EH/s by the end of 2024, with full deployment in 2025, whereby the company expects a total self-mining hash rate capacity of 38 EH/s.

The company sold 212 Bitcoin, representing 41% of their production adding 308 Bitcoin to their ”Hodl”, now totalling 7,648 Bitcoin with a value $325.7 million. This strategy, coupled with our robust balance sheet and integrated operations, strengthens our competitive edge amid Bitcoin’s halving.

SATO Technologies (SATO)

SATO technologies produced 31 Bitcoin during the month of January, at an average daily rate of 1 Bitcoin per day, a reduction of 18.4% on the daily rate achieved in December.

From a production standpoint, the company had the highest production of BTC per EH/s of all the North American Bitcooin miners. SATO Technologies sold 22 Bitcoin, in January, representing 71% of their production increasing their ”Hodl” to 49 Bitcoin, with a value of $2.1 million as at January 31, 2024.

Soluna Holdings (SLNH)

Soluna Holdings produced 44 Bitcoin during the month of January, at an average daily rate of 1.4 Bitcoin per day, a reduction of 8.3% on the average achieved in the month of December.  The decrease, although not as severe as other miners faced, was due to the reduction in Bitcoin transaction fees received in the month.

Soluna Holdings put their efforts into focusing on monetizing stranded power and therefore sell their Bitcoin on a regular basis, preferring to reinvest funds and use them to fund their growth.  The company also provides Managed Infrastructure Services with over 1.5 EH/s of third-party machines hosted at Soluna data centers.

TeraWulf (WULF)

TeraWulf mined 313 Bitcoin during the month of January, at an average daily rate of 10.1 Bitcoin per day, a reduction of 6.3% on the daily rate achieved during the previous month. To offset the reduction in transaction fees, the company installed two-thirds of their recent order of S19j XPs into the fully operational Building 3 at the Lake Mariner site, taking their installed self mining hash rate to 7.1 EH/s. The remaining 5,000 S19j XP units are scheduled for installation by early February to utilize available infrastructure capacity before the Company’s hosting agreement expires. Once installed, the hash rate should reach the Q1 target of 7.9 EH/s.  They have a growth target of 10 EH/s once building 4 is completed

In January, the cost of power for self-mining one Bitcoin averaged $16,737, equivalent to around $0.05 per kilowatt-hour (kWh). This cost calculation does not include revenue from demand response or ancillary services. Strategic performance tuning measures were implemented, such as efficiency mode and selective miner curtailment, especially during a week of high energy prices in mid-January. Additionally, overclocking was utilized to increase hash rates when energy prices returned to normal levels.