By
Temitope Olatunji
April 26th, 2024
Argentina, ranked 12th among global methane emitters per World Bank data, presents opportunities for miners beyond Giga seeking to capitalize on this greenhouse gas.
A Texas-based Bitcoin mining firm Giga Energy expands operations to Argentina after successful ventures stateside and in Shanghai. On Tuesday, the company announced a partnership with Phoenix Global Resources, an oil and gas firm in Mendoza, alongside IT services provider Exa Tech, to launch a two-megawatt bitcoin mine on top of Vaca Muerta.
The organization was founded in 2019 by Brent Whitehead and Matt Lohstroh. Its primary focus lies in utilizing the wasted natural gas emanating from oil fields, subsequently transforming it into electrical energy to fuel its energy-intensive bitcoin mining operations.
Giga Energy deploys shipping containers filled with thousands of Bitcoin miners directly on oil wells. Natural gas is used to make electricity for the mining machines. According to Denver-based Crusoe Energy Systems research, this process reduces greenhouse gas emissions by 63% compared to burning off natural gas.
“By capturing stranded natural gas to power modular data centers for energy-intensive computing, Giga is actively contributing to reducing global methane emissions,” said Whitehead in a CNBC interview. This sustainability-centric approach aligns perfectly with Argentina’s economic challenges.
Giga’s Last Q4 Generates $10 Million from Bitcoin Mining
Bitcoin mining thrives during bullish market cycles; the current surge in Bitcoin value, reaching exceptional highs, catalyzes infrastructure expansion. Bitcoin has surged 170% over the past six months, attaining multiple record price peaks recently, fueled in part by anticipation surrounding the introduction of spot Bitcoin exchange-traded funds in the United States.
Giga’s current quarterly revenue exceeds $10 million, according to Lohstroh. Argentina, ranked 12th among global methane emitters per World Bank data, presents opportunities for miners beyond Giga seeking to capitalize on this greenhouse gas.
The surge in cryptocurrency also supported the stock valuations of publicly traded Bitcoin miners. For instance, CleanSpark witnessed an impressive fivefold jump in 2023, further augmented by a 112% rise this year. Cipher Mining’s shares skyrocketed by over 600% in 2024, followed by an additional 27% gain in 2024.
Argentina’s Economic Turmoil Breeds Bitcoin Opportunity
With out-of-control inflation exceeding 211% in 2023, Argentina faces severe economic volatility. This has compelled several citizens to explore cryptocurrencies like bitcoin as a safeguard against the peso’s dramatic devaluation, seeking a stable store of value amidst the nation’s turbulent economic landscape.
The newly-inaugurated Argentine President, Javier Milei, advocates cryptocurrency and proposes sweeping economic overhauls – abolishing the central bank and replacing the currency with the US dollar – signaling radical shifts in monetary policy and governance since assuming office in late 2023.
“We started this before Milei went into office,” Lohstroh said. “I think it’s pretty interesting that in lockstep, in stride, we’re turning this equipment online in the region, as it’s becoming dollarized and becoming more stable and giving real investment dollars into the economy.”
Challenges and the Road Ahead
While Giga’s initial project is small and not yet intended to be profitable, it represents a significant step towards a more sustainable and economically beneficial future for both the company and Argentina. The initial phase ensures a smooth import process for all necessary equipment before scaling operations.
One potential hurdle is Argentina’s import restrictions, implemented to protect its ailing currency. Federico Brom, Exa Tech’s director of business development, acknowledges this challenge but remains optimistic. “There’s a lot of support, a lot of hype and a lot of interest” in what they’re offering, he said.
Giga’s venture in Argentina is a testament to the evolving landscape of the bitcoin mining industry. By combining entrepreneurial ingenuity with environmental responsibility, Giga Energy is demonstrating that bitcoin mining can have a positive impact, not just on corporate profits but also on the environment and the local economy.