The agreement comes at a time when Bitcoin miners’ revenue has dropped significantly since the halving in April.
Leading bitcoin miner Hut 8 has secured a power purchase agreement for a site in West Texas, marking a major milestone after April’s halving event. The agreement grants the mining company the ability to tap 205 megawatts of power capacity, with the potential for immediate use.
This deal is part of Hut 8’s larger development pipeline, which includes an exclusive energy capacity of 1,100 megawatts.
The mining site is cleverly located near a wind farm and connected to the ERCOT grid. Therefore, it gives Hut 8 access to some of the lowest-cost wholesale power in North America, boosting its bitcoin mining and artificial intelligence (AI) projects. Notably, the mining company has already started data center engineering, procurement, and construction to use this new power source.
The official press release states that the approval of such a large data center load under the complex regulatory framework is the first of its kind. Asher Genoot, CEO of the mining company, commented on the development:
“[The purchase approval] is a testament to the expertise, diligence, and creativity of our corporate development organization, who negotiated a bespoke structure to address the nuanced commercial, legal, and regulatory challenges of each stakeholder in the project.”
Once finalized, the deal will boost Hut 8’s total capacity to around 1.3 gigawatts across its owned and managed services.
Hut 8 Expands
The agreement comes at a time when Bitcoin miners’ revenue has dropped significantly since the halving in April. However, public miners like Hut 8, with robust balance sheets, are capitalizing on market share opportunities as less efficient miners exit the industry. Genoot expressed optimism about the future, stating:
“We continue to identify opportunities to work hand-in-hand with energy partners to develop bespoke structures that generate outsized value for every party involved.”
In June, Hut 8 secured $150 million from technology investment platform Coatue to support the buildout of its AI infrastructure. The company aims to commercialize its AI vertical, with revenue expected in the second half of 2024.
Hut 8’s share price closed up 6% on Monday at $17.48 and currently up 2% in pre-market trading. Amid the company’s continuous expansion, the stock has gained 65% over the past month.
Texas: A Mining Hub
Texas has rapidly become a hub for Bitcoin miners, especially after China banned mining operations in 2021. Major mining companies, including Marathon Digital and Riot Blockchain, have expanded their operations in the region in recent years.
Hut 8’s latest power purchase agreement in West Texas is a significant step forward, positioning the company for continued growth amid rough market terrain.
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