Riot Platforms Expends $291M On Mining Rigs: Here’s Why
Bitcoin Miner On Another Acquisition Spree
Riot Platforms, the famous Bitcoin (BTC) mining firm, has increased its hash rate by purchasing 66,560 mining rigs from MicroBT. The latest purchase makes it one of its most significant expansions to date.
With the $290.5 million acquisition, Riot is preparing for the upcoming Bitcoin halving in April 2024. This investment costs $4,360 per machine and aligns with Riot’s strategy to increase its mining capacity.
This purchase resulted from an initial agreement with MicroBT, in which Riot committed to purchasing 33,280 machines in June. Riot has now secured the right to acquire 265,000 additional miners from MicroBT under the same deal terms following an updated agreement.
The recent move reflects the mining platform’s stance in scaling its operations and strengthening its position in the competitive Bitcoin mining landscape.
Increasing Riot’s Hash Rate
Riot’s CEO, Jason Les, referred to this purchase order as the largest hash rate purchase in the company’s history to improve Riot’s mining performance. The order includes 66,560 miners, 48,000 (roughly 72%) of which are MicroBT’s M66S with 250 terahashes per second (TH/s).
The remainder consists of 14,770 M66 models and 3,720 M56S++ models. Riot’s mining operations will benefit from an increase of 18 exahashes per second (EH/s) with the addition of these machines.
The initial 33,280 miners purchased in June will begin operations in the first quarter of 2024, while the remaining 66,560 will be deployed in Q2 2024. Riot expects its self-mining hash rate capacity to reach 38 EH/s once all 99,840 rigs are operational, which is expected in the second half of 2025.
The upcoming Bitcoin halving event, scheduled for April 2024, was previously cited as a critical driver behind this procurement spree by the company. According to Google Finance, Riot’s stock increased by nearly 9% on December 4, marking a 345% increase in value through 2023.
Bitcoin Miners Rake Profits From Ordinals
Last month signals a surge in activities in the Bitcoin mining space as CleanSpark mined 666 BTC in November, a 5.2% increase from 633 BTC in October and a significant 24% increase from November 2022. CEO Zach Bradford noted a significant increase in fee production, possibly due to increased interest in Ordinals.
This implies that fees may become a more significant revenue source as Bitcoin’s use cases expand. TeraWulf, a Nasdaq-listed company, reported that it mined 323 BTC in November, a 3% increase compared to October.
They attributed much of the rise to higher network transaction fees but did not explicitly link it to the impact of Ordinals. On November 30, Hut 8 finalized its merger with the US-based Bitcoin Corp, forming Hut 8 Corp.
On December 4, the newly formed entity began trading on the Nasdaq and the Toronto Stock Exchange. However, the merged entity’s stock fell by 7.44% on its first exchange trading day.
On a positive note, the broader Bitcoin market has been green since November after the blockchain recorded 40 million Ordinals Inscriptions on its ledger. In addition, the surge in Ordinal Inscriptions increased miners’ gains significantly after BTC’s price traded above the $38,000 mark.
According to Coingecko data, Bitcoin trades at $42,810, up 2.8% in the last 24 hours.
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