Cipher Mining to Spend Up to $350 Million In Massive Capacity Expansion
Cipher Mining has joined the list of companies looking to redistribute the global hashrate – especially in the United States. This week, the U.S.-based mining firm announced a massive, nine-figure deal to expand its capacity.
In a Form 8-K filing with the United States Securities and Exchange Commission (SEC) earlier this week, Cipher Mining confirmed that it would spend between $175 million and $350 million on mining equipment.
Ready to Scale Significantly
The filing also revealed that Cipher Mining had struck a Master Services and Supply Agreement with top blockchain infrastructure and hardware provider Bitfury. The deal will see Cipher Mining purchase 28,000 to 56,000 next-generation Bitcoin mining hardware for $6,250 per rig.
It is worth noting that Cipher Mining is the American subsidiary of Bitfury. Both firms have now worked out a total purchase order, which will see Bitfury deliver the rigs monthly. All in all, the deal’s completion date is set for December 2022. It will be a major milestone for both firms as they look to scale up mining efforts in the wake of a market shift.
Cipher Mining has also agreed to pay an upfront $10 million within three days of the agreement’s implementation. The fee will kickstart the order, with Cipher eventually paying the remainder of the cash in tranches.
The company has enjoyed a rather fruitful year. In March, Cipher Mining inked a $2 billion merger with Good Works Acquisition Corp — a special purpose acquisition company (SPAC) listed on the NASDAQ. The deal also included a $425 million funding round, led by Counterpoint Group and Fidelity Management and Research.
China’s Loss is Mining’s Gain
The global mining landscape was rocked earlier this year when the Chinese government announced a ban on the activity. Since then, there has been a massive redistribution of the hashrate as companies are looking to take advantage of the miner flight from China.
The Chinese crackdown has also been a boon to the global mining industry. More companies have made moves to expand their activities, which means greater capital infusion into the space.
Bitfury Itself is no stranger to this. Just two days ago, The Telegraph reported that the company is finalizing the details of its public offering. The report confirmed that Dutch-based Bitfury had contacted Big Four accounting firm Deloitte to be one of its underwriters.
Its latest funding round came in 2018 when it raised $80 million from top investors like Galaxy Digital at a $1 billion valuation. Now that it is looking to go public, it will be gunning for an even bigger number. As The Telegraph reported, Bitfury is looking to debut in Amsterdam or on the London Stock Exchange.
Asides from Bitfury, several other mining firms are looking towards public debuts. American mining firm Stronghold Digital Mining has announced plans to list 6 million shares on the NASDAQ as it prepares for a $100 million initial public offering (IPO).
The Pennsylvania-based firm filed for a NASDAQ IPO in July, hoping that the funds raised will help fuel a 900% capacity expansion in the next year. It has now filed a final prospectus with the SEC, although approval is pending.
Jimmy Aki
