American firm Riot Platforms has announced the acquisition of Kentucky-based mining company Block Mining for a total of $92.5 million.
Riot Announces the Acquisition of Block Mining – Expands Riot’s Total Potential Power Capacity To 2 Gigawatts.
— Acquisition adds 60 Megawatts (“MW”) of current operational capacity with the potential to quickly expand to 110 MW this year under existing agreements, and a…
— Riot Platforms, Inc. (@RiotPlatforms) July 23, 2024
Riot will pay $18.5 million in cash from its balance sheet and $74 million in common stock. Block Mining may receive an additional compensation of up to $32.5 million by 2025 through power purchase agreements to add capacity.
With the acquisition, Riot will immediately gain access to 60 MW at two sites in Kentucky, with the potential to increase to 155 MW. Of the total operational capacity, 23 MW is used for self-mining, and the company aims to increase this to 110 MW by the end of the year.
Block Mining has also identified a third site in the state, which could increase total capacity to 300 MW in the future, subject to securing necessary power supply.
Data center teams will continue to manage and maintain operations, gaining access to Riot’s financial resources and opportunities through a long-term agreement with miner manufacturer MicroBT.
“This deal allows us to diversify operations nationally and accelerate Block Mining’s expansion in Kentucky. With existing capacity at 60 MW and a portfolio for rapid scaling to over 300 MW, the acquisition supports our goal of achieving 100 EH/s hash rate,” stated Riot CEO Jason Les.
In June, the company continued its hostile takeover attempt of Bitfarms by nominating three independent directors to the latter’s board. Amid a predicted wave of industry consolidation following the halving, CleanSpark acquired competitor GRIID for $155 million. Prior to this, the firm had agreed to purchase five operational bitcoin mining facilities in Georgia for $25.8 million.
In July, Benchmark analysts concluded that mining company Bitdeer had become an attractive acquisition target. They noted the firm’s sufficient capacity and the potential returns from initiatives to launch chips and cryptocurrency mining installations. Benchmark raised the target price for Bitdeer shares from $13 to $16 with a “buy” rating.
Bitcoin Miners’ Market Capitalization Surges by Billions in Two Weeks
The past two weeks have seen a significant increase in the market capitalization of major mining companies, with most experiencing double-digit percentage growth. Experts at The Block noted this trend.
Leading the way was Marathon Digital, which saw its market value rise from $5.51 billion on July 8 to $7.56 billion by the end of the week—a 37% increase. Despite a subsequent decline to $6.99 billion by the close of trading on July 19, the company maintained a 27% gain over the period.
Riot Platforms followed a similar trajectory: during the second week of July, its market capitalization increased by 32%—from $2.78 billion to $3.67 billion. However, the figure later adjusted to $3.16 billion.
Hut 8 Mining showed a rise in value from $1.58 billion two weeks ago to $1.76 billion—an 11% increase.
Smaller players in the segment also increased their market capitalization during this period:
- BIT Digital—from $456 million to $470 million;
- Hive Digital—from $392 million to $427.9 million.
Experts noted that the most significant growth (July 8-15) was demonstrated by companies amid the failed attempt on Republican presidential candidate Donald Trump. In recent months, the politician has positioned himself as a supporter of cryptocurrencies and promised support for mining.
“The crypto market, and the mining sector in particular, may have reacted positively to Trump’s survival. His presence in the political sphere could mean continued support for crypto-friendly policies, including increased attention to domestic bitcoin mining,” analysts suggested.
Bernstein positively assessed the “Trump factor” for miners in the current conditions.