As Bitcoin’s price continues to surge to multi-year highs, mining firm CleanSpark has taken a strategic step to secure its position in the market. The company recently announced the closure of a significant infrastructure deal, with the aim of acquiring a large number of newly minted units of BTC.
According to a press release on Monday, CleanSpark has successfully purchased 60,000 Bitmain S21 miners for $193.2 million. The miners were obtained at an average cost of $16.10 per terahash per second (TH/s). The delivery of these machines is anticipated between April and June of this year. Additionally, the firm has secured a call option to acquire an extra 100,000 machines at a fixed price of $16.00 per terahash, with this option being valid until the end of 2024.
“We are ready to expand into the next bull market without the need to worry about an increase in machine prices, since the call purchase option acts as a hedge to this risk,” wrote CleanSpark CEO Zachary Bradford in an accompanying statement.
Significant Increase in Mining Capacity
Upon full deployment, CleanSpark expects the total mining capacity to reach an impressive 50 exahashes per second (EH/s). This represents a substantial 400% increase from its current fleet. To put this into perspective, it would account for nearly 10% of the entire Bitcoin network’s hash rate. It’s important to note that a ‘hash’ is a guess answer to the cryptographic puzzle that miners consume energy to solve. Furthermore, a terahash is equal to one trillion hashes, and an exahash is equal to one million terahashes.
The acquisition of these mining machines and the subsequent increase in mining capacity is crucial to CleanSpark’s long-term success. The number of Bitcoin accumulated by miners over time offsets the costs associated with energy and equipment. In recent months, the profitability of miners has risen significantly due to an increase in the market value of BTC and the record-breaking transaction fees being paid to miners.
Rising BTC prices naturally lead to an increased demand for mining equipment, which prompted CleanSpark to take proactive measures. CleanSpark CEO Zachary Bradford explained, “In the last bull market, machine prices increased by three to five times, and we expect the same to occur in future bull markets.”
A Positive Outlook
CleanSpark’s stock (CLSK) has experienced remarkable growth, up 385% in the past year. This trend reflects the broader success of mining firms during bull market phases, outperforming BTC itself. Following a brief dip, the stock showed a 5% increase between Monday’s opening and closing prices.
After an impressive rally period, JPMorgan analysts recently adjusted CLSK’s rating to neutral, no longer considering it “overweight.” This change in rating signals confidence in CleanSpark’s ability to navigate the market and capitalize on future opportunities.
