Digital asset mining firm Hut 8 recently announced an interim agreement with Celsius Network to develop and install crypto-mining facilities. This partnership is particularly significant due to Celsius Network’s ongoing bankruptcy proceedings. Under this agreement, Hut 8 will be responsible for building out the Cedarvale site in Texas, which is expected to host over 66,000 miners and be powered by 215 MW of energy. With the rising prices of digital assets, Hut 8 aims to increase its local production capacity.
Development Services and Goals
Hut 8 will provide various technical and skilled developmental services for the construction of the mining center. These services include financial modeling, construction management, procurement, logistics, budgeting, and RFP coordination. The collaboration aims to boost the operations of both companies. Firstly, Hut 8 seeks to build equity with Celsius Network amidst its bankruptcy case and attract new investors. Secondly, Hut 8 intends to increase the strength of local businesses, ultimately reaching a capacity of 895 MW of energy.
“The agreement with Celsius Network allows us to strengthen our position in the mining sector while supporting the growth of both companies,” said Asher Genoot, the President of Hut 8.
Benefits and Future Prospects
Industry commentators believe that this collaboration will greatly benefit and scale up the operations of both Hut 8 and Celsius Network. While Celsius Network requires fresh capital to explore new ventures during its bankruptcy proceedings, Hut 8 sees this partnership as an opportunity to raise its position in the mining sector. Currently, the Canadian-based Bitcoin miner has operational mining locations in North America with a total energy capacity of 680 MW, which will increase further with this agreement.
As miners anticipate the upcoming halving set to occur next year, they are positioning themselves to maximize efficiency and profitability, especially as asset prices rise. During the crypto winter, miners faced significant losses due to reduced asset prices, leading some to sell their Bitcoin reserves, mining equipment, or transition to Artificial Intelligence (AI) computing. However, the recent surge in Bitcoin’s price above $40,000 has put miners in a favorable position to consolidate gains and expand their capacity and efficiency ahead of the next halving.
