Bitcoin mining firm, Bitfarms Limited (BITF), bought 1000 Bitcoins in the first week of January. The purchase which cost $43.2 million brings the firm’s Bitcoin holdings to over 4300 Bitcoins.
Bitfarms Limited aims to accumulate more Bitcoin
According to a recent press release, a Canadian publicly traded Bitcoin mining company, the company added 1000 BTC to its Bitcoin holdings in the first week of January. The purchase marks a 30% increase in its Bitcoin holdings.
The move came amidst a market dip in the price of Bitcoin which is down around 11% so far in January. Bitfarms’ founder and CEO, Emiliano Grodzki noted this in his remark about the purchase stating that they bought the dip to optimize their capital allocation. The CEO said:
Our guiding company strategy at Bitfarms is to accumulate the most Bitcoin for the lowest cost and in the fastest amount of time for the benefit of our shareholders…. With the dip in BTC while mining hardware prices remain high, we seized the opportunity to move cash into BTC.
Bitfarms has been aggressively buying Bitcoin recently. The latest purchase is approximately equal to the amounts of Bitcoin the company bought in the 3rd and 4th quarter of 2021.
The NASDAQ registered blockchain infrastructure company, which boasts of using up to 99% environmentally friendly hydro power, also spent 2021 expanding its Bitcoin mining capacity. In November 2021, the company announced that it had successfully doubled its Bitcoin mining hashrate to over 2 EH/s after it installed over 1500 S19j Pro Bitcoin mining machinery. At the time the chief executive noted that the firm aims to continue increasing its hashrate capacity in 2022. It has already purchased 48,000 MicroBT miners which are scheduled for delivery through this year.
Despite China’s pushback, Bitcoin mining is still a booming business
Bitcoin mining remains highly profitable as a business. The profit margin for Bitcoin miners was estimated to be around 89.6% in 2021 and is projected to reach around 90.8% in 2022 according to Lucas Pipes, an analyst at B Riley.
According to data from Investopedia.com, as of December 2021, the shares of crypto mining companies were the stocks with the most momentum among crypto-related companies. Their report noted Hut 8 Mining Corp. (HUT), Canaan Inc. (CAN), and Bitfarms Ltd (BITF) to be the fastest-growing crypto mining stocks. These mining companies recorded 825%, 764%, and 556% revenue growth respectively year over year.
However, the Bitcoin mining industry continues to face challenges especially in finding sustainable and cheap energy sources and push back from governments. In the US, Congress is preparing a hearing to examine the environmental impact of Bitcoin mining. Meanwhile, in Kazakhstan, Bitcoin miners had to go offline after an internet shutdown caused by riots over a fuel price hike and undertones of an energy crisis in the country.