Bitcoin Miner Bitfarms Seeks to Acquire Stronghold in $164 Million Deal
Highlights
- Bitfarms will offer 2.5 BITF shares to stronghold shareholders as part of this deal.
- During Q2 Stronghold reported a loss of $21.3 million on revenue of $19.1 million, with stock down 60% so far in 2024.
- Bitfarms will benefit from Stronghold's own power generation and interconnection to local grids.
Bitfarms Ltd, the Canada-based Bitcoin mining firm, is recently working out plans to acquire Stronghold Digital Mining in a massive $164 million deal, per the sources familiar with the matter. This development comes amid a failed takeover attempt of Bitfarms by Riot Platforms earlier in June.
Bitfarms Plans To Buy Stronghold Digital Mining
In a press release on August 21, Bitcoin miner Bitfarms is planning to offer 2.5 BITF shares for each Stronghold Digital Mining share held. The transaction also includes the assumed debt that Stronghold has at this point.
Earlier this year in May, Stronghold stated that it was working on the sale of the company amid severe stress on its balance sheet following the Bitcoin halving event in April. The halving event cut down the miner rewards by 50% putting operation stress on most of the mining companies. Some BTC miners are capitalizing on the power demand in the artificial intelligence (AI) industry.
During the second quarter, Pennsylvania-based Bitcoin miner Stronghold Digital Mining reported a loss of $21.3 million on revenue of $19.1 million. As a result, shares of Stronghold have dropped 60% since the beginning of the year.
On the other hand, Bitfarms managed to clock $41.5 million in revenue during the last quarter. The recent acquisition of Stronghold will help the company boost its mining capacity while leveraging Stronghold’s own power generation and interconnection to local grids.
Bitcoin Miner Capitulation Behind Us?
Following the Bitcoin halving event, the continuous selling by Bitcoin miners including Bitfarms has led to BTC underperforming equities and Gold during Q2 2024. However, the Bitcoin miner capitulation could be behind us not with investors gearing up for a post-halving BTC price rally.
Popular platform CryptoQuant recently pointed out the Has Ribbons indicators suggesting an end to miner capitulation. This indicator, which tracks the 30- and 60-day moving averages of the Hash Rate, suggests a recovery in the mining market.
Hash Ribbons signals the end of miner capitulation ⛏️
Hash Ribbons are a popular indicator that highlights periods of stress in the mining market. It uses the 30 and 60-day moving averages of the Hash Rate and has just signaled the end of miner capitulation.
This is logical… pic.twitter.com/pokqp9ccev
— CryptoQuant.com (@cryptoquant_com) August 19, 2024
Recently, the Bitcoin hashrate reached a new all-time high of 638 exahashes per second (EH/s). As the miner worries are behind us, analysts believe that Bitcoin mining stocks could be the best proxy bet on Bitcoin for the next year.
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