The publicly-listed
Bitcoin (BTC) miner from Wall Street, BitFuFu (NASDAQ: FUFU), announced today (Tuesday)
its plans to acquire a majority stake in an 80-megawatt (MW) crypto mining
facility in Ethiopia. The US company is seeking access to cheaper energy in
East Africa due to increasingly lower margins in the BTC mining industry.
The problem
lies in the rising costs. For BitFuFu, they increased by 170% over the past
year, shrinking net profit by 75%.
Wall Street Bitcoin Miner BitFuFu
Purchased BTC Mine in Ethiopia
The
acquisition will boost BitFuFu’s total hosting capacity to over 600 MW, with
approximately 13% now under direct ownership and operation by the Nasdaq-listed
company. This represents a departure from BitFuFu’s previous asset-light
approach, where third parties hosted all of its 522 MW capacity as of
June 30, 2024.
When equipped with the latest Bitmain S21-series miners, the Ethiopian facility is expected to add potential mining capacity of 4.6 EH/s. Notably, the site’s power costs average below $0.04 per kilowatt-hour, which BitFuFu anticipates will lower its overall Bitcoin production expenses.
“This
acquisition is a critical milestone as we work to vertically integrate and
transition towards a more diversified and resilient portfolio of Bitcoin mining
sites,” Leo Lu, CEO and Chairman of BitFuFu, commented. “As we integrate this
facility into our global infrastructure, we can capitalize on lower energy
costs to reduce Bitcoin production expenses, expand our operational capacity,
and enhance profitability.”
Crypto Miners Are Cutting
Costs
BitFuFu’s
decision to acquire the Ethiopian facility comes as part of a broader strategy
to strengthen its competitive position in the mining market. With the majority
of its current mining infrastructure based in the United States, this
acquisition could help boost mining profitability.
The company
plans to implement technological upgrades at the new plant to enhance energy
efficiency and mining capacity. The latest report from BitFuFu, along with the
general trends in the BTC mining industry, shows that this move is essential.
In Q2 2024, the company earned $129 million, which is a 70% increase compared
to last year. However, net profit dropped almost fourfold, from $5.1 million to
$1.3 million, due to significantly
higher mining costs.
“We have
already begun planning for technological upgrades to improve energy efficiency
and mining capacity at this site,” Lu added. “Moving forward, we aim…
