Gryphon Invests $1.5M in Bitcoin Mining Facility with $0.01/kWh Electricity

Key Points:

• Gryphon invests $1.5 million in Louisiana-based Bitcoin mining facilities.
• The new operation boasts remarkably low electricity costs of $0.01/kWh.
• The acquisition includes 2.9 MW capacity and 59 PH/s of mining equipment.

Gryphon Digital Mining, Inc. has acquired a Bitcoin mining facility in Louisiana, leveraging electricity costs as low as $0.01/kWh in a bid to significantly reduce power expenses. This strategic $1.5 million investment helps the company adapt to the challenges of post-halving Bitcoin mining.

Gryphon's Low-Cost Energy Strategy

Gryphon Digital Mining's latest acquisition, announced on August 20, adds 2.9 megawatts (MW) of operational capacity and boosts mining power by 59 petahashes per second (PH/s).

The deal also includes essential infrastructure such as gas-powered generators and containment units.

Gryphon Acquires Ultra Low-Cost Power Mining Operations at ~$0.01/kWh.

Key highlights include:

• Ultra-low cost of ~ 1 cent per kWh
• Identified a pipeline of 500 MW of similar opportunities
• Immediately accretive operating asset that is already generating cash flow

Read… pic.twitter.com/DKNQnjzZJl

— Gryphon Digital Mining (@GryphonMining) August 20, 2024

Gryphon's CEO, Rob Chang, highlighted the significance of this move, stating,  

“We believe that this acquisition of ultra-low-cost power is our first step along an identified path of over 500 MW of similar low-cost power generation opportunities,” remarked Rob Chang, CEO of Gryphon. “The current post-halving world is requiring bitcoin miners to secure low-cost power in order to thrive in an increasing global hashrate environment.”

The company projects that the new mining facility will contribute approximately $1 million to its annual revenue stream.

While focusing on cost-efficiency, Gryphon remains committed to environmental responsibility. 

The company plans to use flare gas—a byproduct of oil extraction typically wasted through burning—as an energy source for its mining operations. 

Related story: TeraWulf’s Bitcoin Mining Slumps in Q2 As Bitdeer Makes Gains

This innovative approach powers their facilities and reduces overall carbon emissions by repurposing otherwise wasted energy.

Chang elaborated on the potential benefits of their low-cost energy strategy, stating that low-cost power will enable a “return on investment on cheaper machines that are not economically viable at higher cost operations.”

Shifts in BTC Mining: Diversification vs. Traditional Mergers and Acquisitions

 It's been a particularly challenging Q2 for Bitcoin miners, with lower-than-expected results evidenced by the reduced rewards post-halving. To combat this, some companies are diversifying their operations. 

A report by investment firm VanEck suggests that Bitcoin miners could significantly boost their revenue by partially transitioning their energy resources to the artificial intelligence (AI) and high-performance computing (HPC) sectors. 

The best time for #bitcoin mining investors to have considered HPC/AI verticals and the players with upside there was 2 or 3 months ago. The second best time is now.

The MWs ARE the assets. The need for cheap power is paramount. Miners will be bought out. Offers are already… https://t.co/CztE59hhrW

— D.R. Lewis ⚡ (@Charge_Stack) June 5, 2024

VanEck predicts miners can earn an extra $13.9 billion by 2027 if they redirect 20% of their energy to these sectors.

Some miners are already making strides in this direction. 

For example, Core Scientific, the fourth-largest Bitcoin miner by hashrate, announced a 12-year deal with AI Hyperscaler CoreWeave, expected to bring in over $3.5 billion in revenue.

Today, Core Scientific announced exercise of additional contract option by @CoreWeave for delivery of ~112 MW of additional infrastructure to host high-performance computing operations.

-Expands total contracted #HPC infrastructure by CoreWeave to 382 MW at 5 $CORZ sites… pic.twitter.com/Z2Fz9dNAC8

— Core Scientific (@Core_Scientific) August 6, 2024

Despite the apparent advantages of diversifying into AI and HPC, some companies remain committed to traditional growth strategies, such as mergers and acquisitions. 

A prime example is Bitfarms. The Canadian crypto mining company is in the process of acquiring its rival Stronghold Digital.

Bitfarms is buying Stronghold Digital for $175 million, paying $125 million in equity and taking on $50 million in debt. Upon ratification, Bitfarms' energy capacity could increase to over 950 MW by 2025, with future expansions possibly pushing this figure to an impressive 1.6 GW.