CleanSpark plans to acquire a facility in Dalton, Georgia, with an initial $3.4 million payment. An additional $3.5 million investment will complete the project by April, expanding Dalton presence to three sites.
On February 6, the shares of Bitcoin miner CleanSpark (NASDAQ: CLSK) surged by a staggering 12% ending the trading session at a price of $8.70. This comes as CleanSpark announced that it would acquire new mining facilities to boost its infrastructure and potentially double its hashrate in the first half of 2024.
The firm has finalized a deal to purchase three “turnkey” sites in Mississippi for $19.8 million in cash, with the transaction slated to be completed within 21 days. These sites, requiring only the connection of existing hardware, will contribute approximately 14% of the company’s revenue shortly after the closing.
Moreover, CleanSpark intends to procure a facility in Dalton, Georgia, with an initial cash payment of $3.4 million. Subsequently, the Bitcoin miner will make an additional investment of $3.5 million to finish the project by April, thereby expanding its footprint in Dalton to three sites. Speaking to CNBC on this development, CleanSpark CEO Zachary Bradford said:
“Our move into Mississippi is all about growing our operations and diversifying our data center portfolio in a measured way. Our operations in Georgia have given us significant experience in southeastern power markets. … Mississippi is in the same electric reliability region, so we see a lot of synergies there.”
The Bitcoin Mining Consolidation
The cryptocurrency sector anticipates consolidation within the bitcoin mining industry, especially among smaller miners with higher operational costs or outdated hardware. This will be true, especially with the upcoming Bitcoin halving in the spring, which will halve miner rewards to 3.125 BTC.
Bradford previously informed CNBC that CleanSpark foresees the likelihood of certain miners exiting the market post-Bitcoin halving. He mentioned the company’s interest in identifying facilities where it can seamlessly integrate its own mining machines. Approximately one month ago, CleanSpark acquired 160,000 mining machines. He added:
“The exciting thing about this expansion is that we’ll be able to quickly slot in our own servers so that we are operating almost immediately after closing the deal, shortening the path to ROI in a very attractive way.”
Typically, mining stocks experience gains with rising Bitcoin prices as they directly correlate with increased mining revenue for the company. In 2023, Bitcoin miners emerged as standout performers, surpassing even Bitcoin itself. CleanSpark, for instance, achieved a remarkable 440% surge in value last year, significantly outpacing Bitcoin’s 157% growth.
Bitcoin Miners on Selling Spree Ahead of BTC Halcing 2024
Bitcoin miners are, however, preparing for an anticipated reduction in revenue stemming from the upcoming halving in April. Since the beginning of 2024, miner reserves, unsold Bitcoin held in digital wallets linked to the companies, have declined by 8,400 tokens to 1.8 million.
This level matches figures observed in June 2021, as per data gathered by CryptoQuant. Analysts interpret this decrease as a sign that miners are offloading tokens.
“Miners have begun to sell more of their coins to bolster balance sheets and fund growth capex ahead of tougher times for margins when block rewards are halved in April. After the halving, scale will matter even more,” said Matthew Sigel, head of digital-asset research at VanEck.