The cloud-based Bitcoin miner BitFuFu has acquired its first fixed-form mining facility. The company announced that the acquisition of an 80-megawatt (MW) facility in Ethiopia is the start of its infrastructure diversification strategy. The value of this deal was not disclosed.
BitFuFu, headquartered in Singapore and listed on Nasdaq, previously had 25 mining facilities as of June 30, all of which were hosted by third parties and mostly located in the United States. The other facilities are in Portugal and Indonesia.
Leaving the cloud, returning to the ground
The company will increase its total capacity from 522 MW to over 600 MW with the new facility and planned upgrades. The deployment of Bitmain S21 mining rigs with application-specific integrated circuits (ASICs) could add 4.6 EH/s to its total mining capacity.
In the second quarter of 2024, BitFuFu's managed capacity will reach 24.7 EH/s. CEO Leo Lu stated in a press release:
"This acquisition is a significant milestone as we move towards vertical integration and transition to a more diverse and sustainable portfolio of Bitcoin mining facilities."
"We can leverage lower energy costs to reduce our Bitcoin production costs, expand our operating capacity, and enhance profitability," Lu added.
The energy costs at this facility average below $0.04 per kilowatt-hour, which will reduce BitFuFu's Bitcoin production costs. BitFuFu's Bitcoin mining costs increased by 168% year-over-year as of the second quarter of 2024.
Source: BitFuFu
Thriving in a complex market
High energy prices and Bitcoin's 4th halving have simultaneously severely reduced Miners' profitability. Many Miners have sought to diversify their computing, shifting to artificial intelligence and high-performance computing.
Miners with healthy cash reserves have benefited from market volatility to ramp up their mining operations. BitFuFu has leveraged this strategy, increasing its second-quarter revenue by nearly 70% year-over-year to $129.4 million.
BitFuFu was founded by executives from Chinese hardware manufacturer Bitmain, with initial investment from that company. Bitmain remains a strategic partner of BitFuFu. Bitdeer is also a spin-off from Bitmain.
