BTC Mining Companies Expand Despite Declining Profitability

Recent announcements indicate that despite a 44% decline in Bitcoin mining profitability over the past year, some Bitcoin mining companies have continued to expand and increase production.

The American Bitcoin mining company CleanSpark announced on June 1 that it had paid $40.5 million for 12,500 brand-new Antminer S19 XP units. The price per terahash per second (TH/s) was $23, less than the average market price.

The news comes on the heels of the Bitcoin mining difficulty reaching a new all-time high of over 50 trillion on June 1, thereby increasing the pressure on miners. The network hash rate was also close to its peak on May 30 at 395 EH/s.

The purchase agreement for CleanSpark stipulated that the manufacturer would ship 6,000 machines in June and the remaining machines in August.

Antminer S19 XP units have a hash rate of 141 TH/s, and the combined purchase will add 1.76 exahashes per second to the network’s total hash rate of 6.7 EH/s. Zach Bradford, CEO of CleanSpark, said:

“This purchase ensures that we are prepared to meet and potentially exceed our year-end target of 16 EH/s.”

CleanSpark’s mining farms are in Georgia, according to the company’s CEO, Zach Bradford. According to its website, the company operates 67,700 mining machines and has mined 2,395 BTC this year.

According to the Hashrate Index, the profitability of Bitcoin mining has decreased to $0.071 per TH/s per day, down 44% over the past year and 82% since the crypto market’s peak in late 2021.

Despite this, the company has continued its expansion.

CleanSpark acquired 20,000 new Antminer S19j Pro+ units in February and 45,000 S19 XP ASIC mining rigs in April.

Bitfarms announced in other recent company updates that it mined 459 BTC in May, an increase of 6.5% year-over-year.

“A 47% increase in our hash rate year-over-year was offset by a 65% increase in network difficulty during the same period,” said Chief Mining Officer Ben Gagnon.

In May, Cipher Mining reported a record production of 493 BTC mined. Transaction fees spiked during the BRC-20 memecoin minting frenzy, which peaked in early May.

On May 31st, Compass Mining and hosting provider Arthur Mining signed an agreement to open a new facility in Ohio.