Is
Bitcoin’s new all-time high (ATH) of $90,000 the right moment to secure a $100
million credit line? If you’re a Bitcoin miner from Wall Street, the answer is
definitely yes. This exact move was made by Nasdaq-listed digital asset mining
company BitFuFu (NASDAQ: FUFU), which has secured additional financing from
AntPool Technologies.
Wall Street Bitcoin Miner
BitFuFu Lands $100M Credit Facility From Antpool
BitFuFu
aims to expand operations and potentially pursue acquisitions while maintaining
its Bitcoin holdings. It’s hard to imagine a better moment for infrastructure
investment than during this dynamic bull run of BTC, which gained over 10% in
value on Monday and is testing new all-time highs just below $90,000 on Tuesday.
The
two-year Master Loan Agreement will provide BitFuFu with access to capital at a
6.5% annual interest rate. The facility will be collateralized by the company’s
Bitcoin holdings at a 70% loan-to-value ratio, with Antpool Technologies
serving as custodian for the secured assets.
The cloud
mining provider, which maintains strategic ties with mining hardware giant
Bitmain, plans to use the funds for general corporate purposes, including
covering hosting fees and exploring merger and acquisition opportunities. The
company has not yet drawn any funds from the newly established credit line.
Even before
the announcement, FUFU shares surged over 18% on Monday, reaching $5.73, the
highest since July 2024. This rise aligns with gains seen among other Wall
Street Bitcoin miners, driven by Bitcoin’s strengthening and the broader
digital currency ecosystem. Notably,
Dogecoin led the surge, testing $0.32 on Monday with a 152% increase, and
by Tuesday, it had gained an additional 10 cents.
HIVE Digital Technologies Ltd. (NASDAQ: HIVE) has already made a similar move and ordered 6,500 Avalon A1566 miners from Canaan, aiming to expand its Bitcoin mining capacity from 5.6 EH/s to 12.5 EH/s by Q3 2025. This $100 million investment is part of HIVE’s strategy to establish a 100 MW hydroelectric-powered data center in Paraguay, leveraging the Itaipu Dam’s renewable energy
BitFufu Expands to
Ethiopia to Combat 170% Surge in Production Costs
The $100
million credit line is another move by BitFufu to fight the surging production
costs of Bitcoins. Last month, the Wall Street Bitcoin miner revealed plans to
acquire a majority stake in an 80-megawatt (MW) crypto mining facility in
Ethiopia. This move aims to access East Africa’s cheaper energy resources as
the BTC mining industry faces narrowing profit margins, exacerbated by a 170%
increase in BitFuFu’s production costs over the past year, which slashed net
profit by 75%.
With this
acquisition, BitFuFu’s total hosting capacity will exceed 600 MW, with around
13% now directly owned and operated by the company. This marks a shift from its
previous asset-light model, where third parties hosted its 522 MW capacity as
of mid-2024. The firm also plans to implement technological upgrades to enhance
the new facility’s energy efficiency and mining capabilities.
In Q2 2024,
BitFuFu’s revenue rose by 70% year-over-year to $129 million, but net profits
plummeted from $5.1 million to $1.3 million due to soaring costs. As reported,
industry-wide miner revenue has declined, reaching $827.56 million, the lowest
since September 2023, underlining growing pressures from rising mining
difficulty and costs.
This article was written by Damian Chmiel at www.financemagnates.com.
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