Bitcoin miners seek profitability through consolidation: Crusoe acquires peer mining firm

Crusoe Energy Systems has just acquired the operating assets of Great American Mining, as bitcoin mining consolidation goes on

Bitcoin miners

Bitcoin miners seek profitability through consolidation. Source: shutterstock.com

Colorado-based Bitcoin miner Crusoe Energy Systems has announced the acquisition of the operating assets of portable BTC mining operator Great American Mining (GAM). The deal will increase Crusoe’s mining output and enhance Digital Flare Mitigation business through additional scale and customer relationships.

When GAM’s operations integrate into Crusoe’s, they will also add around 4,000 application-specific integrated circuit (ASIC) crypto-mining rigs, increasing Crusoe’s capacity by about 9%. In addition, the acquisition could improve the mining process sustainability.

GAM builds and deploys portable BTC mining facilities, helping oil and gas companies take advantage of otherwise wasted natural gas for mining purposes. Crusoe will have about 125 of these gas-powered waste containers deployed and operating, thus reducing an annual CO2-equivalent emission of around 170,000 cars.

Market situation

The acquisition is not the first in the sector plagued by pressures from both the traditional and crypto markets. Miners today fail to reach profitability as the bear crypto market cannot keep up with the wider economic downturn and rising energy. 

Around 20 Bitcoin mining companies have recently raised additional capital through IPOs. Meanwhile, shareholders demanded a high correlation to the underlying Bitcoin price. Therefore, mining companies bought Bitcoin directly from the market at costs higher than their mining operations’ worth. Further capital expenditure investments came as they placed equipment orders a year in advance. 

While waiting for the equipment, some miners sold large parts of their BTC reserves to redeem expenditures. However, that didn’t bring profitability, so wider industry restructuring is now happening. Larger miners effectively use the opportunity to snap cheap equipment and related assets amid tough market conditions. 

Further consolidation is expected, as it allows to limit market and bankruptcy risks. Moreover, as the mining industry matures, the expected consolidation is likely to drive ‘regular folks’ that use their personal computers out of the market altogether.

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