Key Trends in Crypto Mining Acquisitions: Insights and Forecasts for 2024

We hope this article and analysis provide valuable guidance for future mining acquisition decisions and help forecast trends for growth in the sector. Companies that embrace vertical integration, advanced technologies, and sustainability, while managing financial risks, are expected to remain competitive in 2024 and beyond.

This article was co-authored by Robert Davidoff (Bentaus Energy) and Harvey Blom (GRN Energy).

Reviewed Deals:

1. Stronghold: $175 million for 750 MW, using containers in PJM ISO.

2. Cipher Mining: $67.5 million for 250 MW, utilizing containers in ERCOT ISO.

3. Riot: $92.5 million, involving a building structure in MISO ISO.

4. Marathon Digital: $87.3 million for 200 MW, using containers in ERCOT.

5. Cleanspark: $27.5 million for 300 MW, using containers in MISO ISO.

Suggested Comps for Future Sales:

- Price per MW: Recent deals indicate a range of $175k to $436k per MW. Future targets could aim between $350k to $650k per MW depending on the property’s status, proximity to an metropolitan and node, fiber access, and available energy.

- Capacity Focus: Aim for larger capacities, like 400 MW to 600 MW, to support scalable expansions and anticipate potential transitions to AI or HPC.

- Location Trends: Deals emphasize regions such as ERCOT, PJM, and MISO, with an increasing focus on renewable energy integration.

- Scalability: Containers offer greater flexibility and scalability, making them ideal for future deals, especially for transitioning to higher-tiered data centers.

Sales Trends Observed:

- Competitive Pricing: Regions like ERCOT, PJM, and MISO remain in demand.

- Renewable Energy: Prices are rising in regions with renewable energy integration, driven by partnerships that can mitigate rising energy costs for data centers.

- Container Flexibility: Containers offer mobility, though some regions are restricting their use near residential areas.

- Energy Trial Fees: Becoming standard, such as Cipher Mining's $3/MW fee with a 5-year term.

- AI and HPC Transition: Companies are preparing to retrofit for AI and HPC workloads.

- Modular Infrastructure: Modular designs are gaining traction for reducing upfront costs and enabling easier expansion or entry into the AI/HPC market.’

- Pricing Evaluation: A good evaluation method is using comparables or comps with other deals closed in the marketplace. There is a value applied to the MWs based on the type of MW:

(# operational MWs operational MW price) + (# firm MWs firm MW price) + (# potential MWs * potential MW price)

$25k to $50k per MW is the blended market price for potential power, energized locations market price is $ 165k to $325k per MW and buildout locations market price $230k to $650K per Mw. Prices can very based on energy market, proximity to nodes, fiber access, assets included, energy and tax programs, demand and if it is a lease or buy.

General Market Trends:

Key trends in crypto mining acquisitions are driven by technological, operational, and financial factors:

1. Mergers and Vertical Integration: Increased mergers and acquisitions, particularly aimed at vertical integration. Miners are moving away from "asset-light" models by acquiring power sites and other assets to optimize operational efficiency as post-halving costs increase.

2. Advanced Hardware: New ASIC technologies are enhancing mining efficiency, reducing energy consumption, and improving decision-making processes.

3. Sustainability and Renewable Energy: There’s a growing focus on renewable energy to cut operational costs and enhance appeal, driven by regulatory and long-term efficiency needs

4. Regulatory Compliance and Financial Strategies: Evolving regulations are prompting miners to use financial tools like derivatives to hedge risks. Distressed miners may become acquisition targets as markets stabilize.

Smaller 2024 Acquisitions:

Smaller deals (under $50M) are focusing on strategic partnerships and specialized assets like energy-efficient containers. These deals are more regionally adaptive, leveraging localized renewable energy sources such as wind and gas.

Sources:

- [Bitfarms Acquires Stronghold Digital Mining](https://ir.strongholddigitalmining.com/news-releases/news-release-details/bitfarms-acquire-stronghold-digital-mining)

- [Cipher Mining Acquires a 300 MW Site](https://investors.ciphermining.com/news-releases/news-release-details/cipher-mining-announces-acquisition-new-300-mw-data-center-site)

- [Riot Platforms Expands Capacity](https://www.riotplatforms.com/riot-announces-the-acquisition-of-block-mining-expands-riots-total-potential-power-capacity-to-2-gigawatts/)

#Mining #RenewableEnergy #Acquisitions #DataCenters #HPC #AI #EnergyEfficiency #Sustainability

About Bentaus Energy:

Bentaus Energy specializes in sustainable and renewable energy solutions, focusing on wind, solar, and geothermal power. Committed to strong environmental, social, and governance (ESG) standards, Bentaus is driving the global energy transition towards a more sustainable future. Their innovative energy infrastructure serves both commercial and residential clients.

- Infrastructure Pipeline: 780 MWs.

- Patent Holder: Carbon Capture Technology for air-cooled systems.

- Education: Creator of the world’s first accredited Bitcoin Technician Course.

- For HPC: Energy Management system, Carbon Management, Heat management

- Partnerships: Official HPE partner.

About GRN Energy:

GRN Energy focuses on delivering eco-friendly power solutions, specializing in solar, wind, and energy strategies. The company aims to reduce carbon footprints while providing reliable and cost-effective energy options, positioning itself as a leader in the clean energy sector.

- Co-Founder: Indonesian Digital Council.

- Innovations: Circular Approach methodology.

- Pipeline: 160 MW in Ethiopia, 5 GW of solar in the French Territories, and 3000 hectares of energy and data center park in Indonesia.

- Facilitated: Over 80 MW of power to date.

For more information, visit their respective websites and explore their projects and initiatives.