Bitcoin miner CleanSpark has agreed to acquire its rival GRIID Infrastructure for $155 million, according to a June 27 statement.

The companies also revealed that they entered an exclusive hosting agreement for all currently available power, of which 20 MW will be allocated to CleanSpark effective immediately.

This development arrives as BTC miners significantly struggle following the recent halving event that impacted their earnings. As a result, several miners have begun efforts to diversify their revenue streams by mining altcoins and pivoting towards AI.

Acquisition details

Under this deal, CleanSpark will take on all of GRIID’s existing debt and obligations. Additionally, the miner has provided GRIID with a $5 million working capital loan and a bridge loan of about $50.9 million to cover certain obligations at the time of signing.

CleanSpark CEO Zach Bradford stated that this acquisition would help the firm replicate its success in Georgia over the next three years in Tennessee. He commented:

“[This acquisition] will enable us to exceed 100 megawatts in Tennessee by the end of this year and grow to 200 megawatts in 2025, eventually surpassing 400 megawatts in 2026.”

Both companies’ Boards of Directors have unanimously approved the transaction, which is expected to close in the third quarter of 2024. However, the acquisition still requires approval from GRIID shareholders and must meet other customary closing conditions.

When the deal is completed, GRIID shareholders will receive CleanSpark common stock. The exchange ratio will be calculated by dividing the total merger consideration by the number of GRIID common shares outstanding at the merger’s closing.

GRIID was established in 2018 and subsequently began mining in 2019. The company runs four mining facilities in Watertown, New York, and Limestone, Maynardville, and Lenoir City, Tennessee. Additionally, it has a Research and Development Center in Austin, Texas, and a Development, Deployment, and Equipment Repair Center in Rutledge, Tennessee.

Following the news, GRIID shares fell around 50%, while CleanSpark’s rose nearly 4%.

Bitcoin miner Marathon Digital is diversifying its revenue by mining Kaspa, a proof-of-work (PoW) layer 1 blockchain network.

The miner said it became interested in Kaspa in May 2023 when its internal analysis revealed diversifying opportunities beyond Bitcoin mining. The company deployed its first Kaspa mining machine in September 2023.

Since then, Marathon Digital has mined 93 million KAS tokens, worth about $15 million as of June 25.

Following this announcement, KAS, the native asset of the Kaspa network, surged by 9% to a multi-week high of $0.18.

Why Kaspa?

Marathon Digital said it selected Kaspa due to its fair launch, advanced technology, growing ecosystem, and high profitability (enhanced $/kWh). Additionally, it noted that Kaspa integrates well with its existing data center sites, requiring minimal reconfiguration.

The company further highlighted that the Kaspa network processes one block per second. This rapid transaction speed potentially allows miners to earn more block rewards within a given timeframe.

This increased profitability opportunity enhances its operational flexibility and allows it to establish digital asset data centers in locations where Bitcoin mining may not be viable.

Adam Swick, Marathon’s chief growth officer, added:

“By mining Kaspa, we are able to create a stream of revenue that is diversified from Bitcoin, and that is directly tied to our core competencies in digital asset compute.”

Marathon eyes 16% of Kaspa’s global hash rate

Marathon Digital aims to dominate Kaspa’s mining industry. The miner revealed the purchase of 60 petahashes of KS3, KS5, and KS5 Pro ASICs from Bitmain, which will boost its Kaspa generation.

The company highlighted that Kaspa ASICs are among the most profitable on the market. A KS5 Pro can generate approximately $79 daily profit, compared to $11 from a BTC-mining S21.

These Kaspa ASICs will be deployed in Marathon’s Texas facilities. While the project is not yet fully operational, it is expected to be fully energized by Q3 2024.

Once deployed, the machines will account for about 16% of Kaspa’s global hash rate. Although this is significant within Kaspa’s ecosystem, it represents only 1% of Marathon’s 1,100 MW data center portfolio.

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Alliance Resource Partners (ARLP), a US-based coal mining company, said it has successfully mined 425 Bitcoin worth $30 million by harnessing excess energy from its facilities, according to its first-quarter earnings call.

However, crypto environmentalist Daniel Batten argues that the firm’s pivot to BTC mining could harm the “environmental narrative” around the flagship digital asset. He said:

“Bitcoin mining companies have moved off using coal. But I guess you can’t stop coal mining companies mining Bitcoin. Either way, in terms of changing the environmental narrative around bitcoin, this doesn’t help.”

Over the past years, BTC mining companies have increasingly relied on green energy sources, with over 50% of their energy sources powered by renewable sources.

ARLP’s entry into the BTC mining scene could prompt critics to renew their concerns about the environmental hazards associated with the sector.

ARLP Bitcoin mining

ARLP CFO Cary Marshall explained that the company initiated its Bitcoin mining endeavor through a pilot project that began in 2020 by utilizing the surplus power generated from its mining operations at the River View mine. He said:

“If you look at the end of the quarter, we ended up with about 425 Bitcoin at quarter-end in terms of what we own. We’re not actually out there buying Bitcoin or anything of that nature. We’re mining the Bitcoin associated with these miners that we have.”

Marshall further revealed that the firm has maintained its financial stability by periodically liquidating a portion of its Bitcoin holdings to cover operational expenses. He added that the company mined around 69 BTC during the first quarter of this year, of which 25% were sold to meet overheads.

Meanwhile, ARLP CEO Joe Craft said the company is taking a cautious approach to BTC mining by ensuring its exposure to Bitcoin remains limited by selling acquired assets to offset costs. Additionally, ARLP optimizes its surplus capacity by leasing it to other Bitcoin miners, leveraging its data center infrastructure to capitalize on low energy expenses.

Nevertheless, the coal miner hopes it will be able to mine as much as 190 BTC by the end of the year. Marshall stated:

“I think when we look at the full year in total, our projections would show somewhere between 175 to 190 or so Bitcoin for the year in total that we would mine. Now, we would monetize some of that to cover our operating expenses. So, our net would probably be, I don’t know, maybe around 60% of that number or so ultimately at the end of the day.”

Bitcoin miner Marathon Digital has reviewed its hash rate target for this fiscal year to 50 EH/s, according to an April 25 statement.

Initially, the miner aimed to boost its mining capacity by about 46% by year-end to as high as 37 EH/s from 24.7 EH/s. However, buoyed by its recent acquisition of a 200-megawatt Bitcoin mining center from Digital Applied, Marathon now anticipates a 100% increase in its mining power, reaching 50 EH/s by year-end.

Marathon’s Chairman and CEO, Fred Thiel, expressed confidence in achieving the new target, attributing it to the recent acquisition that has provided access to additional hash rate.

Thiel noted:

“With our current liquidity position, this growth target is also fully funded and there is no need for us to raise additional capital to achieve our objective. By deploying state of the art equipment and our own proprietary technology, we also believe that we can improve our fleet efficiency and approach 21 joules per terahash as we grow to 50 exahash.”

Marathon is the largest publicly traded Bitcoin mining firm in the world. According to data from the Bitcoin Treasuries, the company holds more than 17,000 BTC.

Marathon’s ambitions to boost its hash rate haven’t been deterred by the significant uptick in Bitcoin’s mining difficulty.

On April 24, the network’s mining difficulty increased by 2%, marking the first adjustment since the fourth Bitcoin halving.

Halvings reduce block subsidies, often leading to a steep decline in mining profitability. This prompts some miners to halt operations, causing the hash rate to drop.

However, CryptoSlate analysis attributed the recent hash rate spike to miners joining the network to capitalize on the 6.25 BTC block rewards before the April 20 halving. Moreover, transaction fees, particularly from Runes, have remained elevated, offering further incentives for miners to maintain their operations.

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