Bitcoin underwent its fourth “halving” earlier this month, and while this typically results in a bullish spike in prices, this year will see a major reckoning in this digital space–and the winners will be those with the lowest all-in costs and the smartest energy setup.
The path to profitability is paved by energy sources, with crypto mining now under intense scrutiny for threatening the stability of the grid and, in some cases, causing electricity prices to skyrocket on the excessive demand.
This is the “death of dirty miners”, Rob Chang, CEO of Gryphon Digital Mining, the maverick in this segment that has gone carbon-neutral and boasts one of the lowest all-in mining costs in the industry, told Bloomberg BNN in a recent interview.
If Bitcoin fails to spike significantly from the halving, all-in costs per coin, which have risen during the event, could put some crypto miners out of business. They won’t be able to cover their energy costs and still remain profitable. Once they withdraw from mining activities, we could see even more bullish scenarios for bitcoin due to a reduction in competition.
Using power from a hydroelectric dam along the St. Lawrence River in New York, Gryphon Digital Mining is the dark horse in the crypto-mining segment, not just because it’s one of three lowest-cost bitcoin miners in the world, but because it’s also the cleanest.
Its digital mining operations are 100% carbon-neutral, and in fact, 100% renewable. Meaning that it doesn’t need any carbon offset credits to get to carbon neutrality. Also the company has gone carbon-negative, contributing to rather than straining the local grid.
That’s a dual-pronged victory on the path to profitability for bitcoin miners …
All-In Mining Costs: The Post-Halving Purge The most savvy of bitcoin miners have spent the past few years trying to make mining less expensive and energy plays a huge role. Following the fourth halving in April this year, many analysts said they expected the event to significantly impact American miners to the point of ‘halving’ their revenues.
And energy efficiency is what separates those who survive and thrive, post-halving.
“This acts as a great filter, distinguishing between efficient, profitable miners and those less capable,” Raphael Zagury, chief investment officer at Swan Bitcoin — a Bitcoin-focused financial services company — told Cointelegraph in February.
Gryphon Digital Mining’s (NASDAQ: GRYP) mission is to create an extremely nimble, energy efficient, environmentally responsible and highly profitable mining outfit.
Gryphon has some of the lowest costs among the 15 industry leaders, based on Cantor Fitzgerald Research Methodology.
Gryphon produces a coin for just over an implied forecasted cost of $44,989, compared to Argo Blockchain (ARBK), which produces at the highest end for over $77,500 per coin, and Stronghold Digital Mining (SDIG), which produces for around $66,100 per coin.
Source: Gryphon Digital Mining investor presentation
And it has another significant advantage, as well: not only are Gryphon’s mining operations 100% carbon neutral, but they’re also giving back.
The First Carbon-Negative Bitcoin Miner
In 2023, Gryphon was operating at 98% renewable energy, and by 2024, it was 100% clean and green–a first for bitcoin mining in North America.
Last year, Gryphon was the first bitcoin miner to receive a Sustainable Bitcoin certification (Green Proofs for Bitcoin, GP4BTC) by Energy Web, an independent non-profit working to develop open-source software for clean energy solutions.
“Proving to our investors and the market that we have kept and exceeded our promises to remain ESG-focused, with transparent reporting of our carbon emissions, or lack thereof, solidifies our commitments and our leadership in this industry. In the 2023 financial year, 98% of our operations were powered by 100% renewable energy. To go one step further in 2024, we are now 100% renewable,” Chang said in a press release.
“Gryphon is a pioneer in the realm of zero-emissions bitcoin mining, with a limited carbon footprint thanks to its now exclusive use of renewable energy,” said Adam Hearne, CEO of CarbonChain, which measures Gryphon’s emissions annually.
In terms of overall efficiency, again Gryphon leads the industry. Since its launch, it has been among the top 4 in terms of efficiency among its peers, and in six of the last 12 months, it has been either the No. 1 most efficient bitcoin miner, or tied for the No. 1 slot, according to the company’s investor presentation.
Finally, a Bitcoin Miner That Meets Energy Transition Requirements
Real transparency in the bitcoin mining world is hard to come by, which makes the segment a minefield for investors who need miners to be more efficient and cognizant of all the scrutiny the industry is coming under for threatening the grid with excessive energy usage.
Gryphon (NASDAQ: GRYP), developed in partnership with over 35 miners, grid operators, NGOs and energy and cryptocurrency experts, has positioned itself ahead of the times, with transparency, accountability and a path to profitability that isn’t just in line with an energy transition–it’s also the backbone of this unique bitcoin miner’s low production costs compared with its peers.
Pressure is mounting–significantly–for crypto mining companies to embrace renewable sources of energy to power their mining operations in a world that is desperately trying to reduce carbon footprints.
Digital mining is a huge energy consumer due to the massive amounts of electricity required to power all the hardware.
Scrutiny over crypto-mining energy use has hit fever pitch this year, with the Energy Information Administration (EIA) reporting in February that digital mining could represent more than 2% of total annual electricity use in the United States. The EIA estimated that as of January 2022, nearly 40% of all bitcoin mining was being undertaken in the United States, and that these operations were consuming the same amount of electricity as up to 6 million households.
The Biden administration reportedly reached an agreement with bitcoin miners in late February to collect energy usage data from the industry, which has been a highly sensitive and even litigious issue due to the fact that most bitcoin miners have been enjoying lack of transparency in an industry where rules and regulations are still being developed.
Gryphon (NASDAQ: GRYP) isn’t among them. Instead, it’s validating the idea that bitcoin can be produced without carbon emissions. In fact, this digital miner is giving power back through carbon offset deals, effectively rendering it “carbon negative”.
Gryphon’s flagship facility in New York is located near and utilizes power from the Moses-Saunders Power Dam, nestled between the U.S. and Canada on the St. Lawrence River, regulating the level of a river flowing from the Great Lakes to the Atlantic. Hydroelectric power stations offer steady, reliable and cheap energy.
Source: Ontario Power Generation
While Chang says “greedy bitcoin miners” were “easy to target”, especially those using dirty coal to power their machines, Gryphon seeks to be on the right side of history.
Gryphon’s approximately 9,000 machines are now powered entirely by clean, renewable energy sources.
Gryphon is partnering with one of the biggest digital data centers in the world and uses 28 MW in an economic opportunity zone. The partnership deal reduces capital investment and financial risk because of the hosting and share structure.
The end result, with innovators such as Gryphon, could be a boon for renewable energy producers, offering them a potential financial lifeline for any surplus power they generate.
Survival of the Bitcoin Fittest
Gryphon (NASDAQ: GRYP) has accumulated a lot of new leverage in the market now that it’s conquered cost-efficiency and energy-efficiency in an innovative new crypto business model. And that’s thanks to its team of the best crypto thinkers in the industry.
The newly public company is led by CEO, President and Director Rob Chang, a commodities expert who formerly served as CFO of Riot Blockchain as well as managing director and Head of Metals and Mining for Cantor Fitzgerald.
Chang is joined by another major name in crypto currency as Chair of the Board, Brittany Kaiser, a world-renowned blockchain thought-leader who has not only co-authored over 40 laws in the United States designed to promote and protect blockchain businesses, but also serves on the state of Wyoming’s Congressional Standing Committee on Blockchain, Fintech and Digital Innovation.
Gryphon’s CFO is Sim Salzman, former CFO of Marathon Digital Holdings. Salzman oversaw market cap growth for Marathon from $500 million to over $8 billion in a 12-month period. The company’s chief technical advisor is Chris Ensey, another familiar face formerly of Riot Blockchain, the founder of Dunbar Cybersecurity, and a former Associate Director for IBM.
With an executive team amongst the “Who’s Who” of the blockchain and crypto industry behind it, a clean and green path to profitability, a fail-safe Chair of the Board with her finger on the pulse of the regulatory environment, Gryphon is making the most of its public listing, and expectations are that it will pursue an aggressive acquisition and diversification strategy in the near future.
ESG funds have been shunning this sector because of the carbon footprint, which makes Gryphon stand out even more. Large ESG funds have been pushing for some sort of green certification, which very few crypto miners can produce.
This is a story of innovation that both crypto mining and artificial intelligence (AI) can learn from. In this survival-of-the-fittest quest, Chang says that power costs are the key to margins, and finding a low-cost power source is only half the battle.
Developing a carbon-neutral (or even negative) bitcoin miner is what can get institutional, and ESG, attention. And Gryphon has plenty of room to run with its innovative solutions.
Now that it’s a public company, Gryphon can expand further and scoop up other miners who haven’t been able to get their costs down post-halving, Chang told Bloomberg BNN in February.
“To date we are the only Bitcoin miner we are aware of that is 100% ESG committed. While others may claim that they are green right now, it doesn’t preclude them from using carbon emitting power later,” Chang told Bloomberg BNN.
By. Josh Owens
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