Riot Platforms, operating two Bitcoin ($BTC) mining sites in Texas, acquired another two facilities from Block Mining, a Kentucky firm.
With the acquisition, Riot aims to achieve its 100 exahashes per second (EH/s) target.
Currently, Riot Platforms is the world’s third-largest $BTC mining firm with a 22 EH/s deployment rate, outpaced by Marathon Digital Holdings’ 31.5 EH/s.
Riot Platforms, one of the global leaders in Bitcoin ($BTC) mining infrastructure, acquired Kentucky-based Block Mining for $92.5M, with $18.5M in cash and $74M in Riot stock. Block Mining could acquire another $32.5M in 2025 by securing additional power contracts.
“The acquisition of Block Mining marks a significant milestone for Riot as we continue to expand our growth pipeline,” said @JasonLes_, CEO of Riot. “This transaction allows us to diversify our operations nationally and accelerate Block Mining’s expansion in Kentucky. With a… https://t.co/vlt648TLDo pic.twitter.com/M2B2GyyyzL
— Riot Platforms, Inc. (@RiotPlatforms) July 23, 2024
Let’s explore the deal’s details.
Riot Becomes the World’s Third-Largest Mining Firm
Riot Platforms operates two of North America’s largest $BTC mining facilities in Texas with an aggregate capacity of 1.1 gigawatts (GW).
The Rockdale facility has a hash rate of 14.7 EH/s and employs 250 staff, while the Corsicana site operates at 7.3 EH/s with 135 local employees.
Riot Platforms’ hash rate soared by 50% in June and surpassed CleanSpark and Core Scientific, both reporting hash rates of over 20 EH/s.
Currently, the company ranks third among $BTC miners globally by market cap, nipping at the heels of CleanSpark but significantly outpaced by Marathon Digital Holdings.
The hash rate increase helped Riotmine 255 $BTC in June, a nearly 20% increase from May. However, it still represents a 44% drop year-to-date.
The company held all the $BTC it mined in June, bringing its total holdings to 9.3K $BTC, worth approximately $600M at the current price of $64,287 per token.
Diversification and a Step Towards 100 EH/s
Block Mining operates two sites with a combined capacity of 60 megawatts (MW) and a maximum capacity of 150 MW. Currently, Block Mining uses 23 MW for self-mining, leases 18 MW to mining tenants under hosting agreements, and the remaining 19 MW are vacant.
Of the 18 MW allocated for hosting agreements, Riot will be able to use 8 MW for self-mining in two to three months. Moreover, Riot intends to increase the site capacity to 110 MW by the end of the year.
With the acquisition, Riot achieves several goals:
Geographical diversification of Riot’s operations to reduce reliance on a single region
Increased mining capacity and a major step toward the 100 EH/s target
Access to new power markets through Block Mining’s existing operations, particularly a long-term fixed-price agreement with MicroBT
Team expansion with experienced management and operational personnel from Block Mining.
The deal immediately adds 1 EH/s to Riot’s current hash rate, with the potential to add 16 EH/s by the end of 2025, bringing the cumulative deployment rate to 38 EH/s.
Block Mining CEO Michael Stolzner highlights that Riot Platforms shares the company’s vision for energy-efficient $BTC mining and team values.
Final Thoughts
Beyond immediate capacity gains, the Block Mining acquisition unlocks strategic benefits for Riot. It solidifies Riot’s position on the $BTC mining playfield and brings it closer to its ambitious 100 EH/s target.
Marathon Digital Holdings’ recent contract breach resulted in a $138M fine and could hinder its ability to expand operations. This opens a window of opportunity for Riot to increase its market share and potentially become the world’s number one BTC mining firm.
References
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