Bitcoin Price Decline Prompts US Mining Firm to Shut Down 'Indefinitely'

Digital Farms is halting operations due to low bitcoin prices, its owner says.

AccessTimeIconMar 27, 2020 at 1:30 p.m. UTC
Updated May 9, 2023 at 3:07 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Digital Farms, a California-based cryptocurrency mining company, is putting its operations on hold due to the recent decline in bitcoin's (BTC) price.

On March 18, the miner's parent company, investment firm DPW Holdings, filed an update with the U.S. Securities and Exchange Commission (SEC) on its business related to the COVID-19 pandemic, which has been heavily affecting companies and markets globally. Among other closures and down-scalings, its mining business is being shuttered. 

  • Big Tech Comes to Small Town: A Bitcoin Mining Story in Spur
    15:03
    Big Tech Comes to Small Town: A Bitcoin Mining Story in Spur
  • What's the Biggest Misconception People Have About Bitcoin Mining?
    00:39
    What's the Biggest Misconception People Have About Bitcoin Mining?
  • What You Need to Know About the Bitcoin Halving
    01:47
    What You Need to Know About the Bitcoin Halving
  • Bitcoin Miner Bitfarms Warns of Default
    04:20
    Bitcoin Miner Bitfarms Warns of Default
  • “Digital Farms' cryptocurrency mining operations have been suspended indefinitely, primarily due to the sharp decline in the market price for bitcoin,” the company wrote.

    Last May, DPW announced Digital Farms, formerly Super Crypto Mining, had obtained a 617,000 square foot facility in the U.S. to set up operations with “immediate access to 28 megawatts of power and an infrastructure to support up to 300 megawatts.”

    Super Crypto Mining was acquired by DPW in January 2018 and later re-branded as Digital Farms. According to DWP's annual report filed with the SEC in April 2019, the mining operation had started off by borrowing $5 million from two institutional investors and buying a thousand of Bitmain's Antminer S9 mining machines. Mining of bitcoin, litecoin (LTC) and ether (ETH) under the new owner kicked off in February 2018.

    The company’s first yearly revenue from crypto mining was $1.67 million, a small portion of DPW's total $27 million revenue, according to the 2019 report. The company had been planning to mine the top 10 cryptocurrencies by market capitalization and also offer cloud mining services.

    Discussing its scenario under the coronavirus pandemic, DWP said in the latest filing: "Due to the unprecedented market conditions domestically and internationally, and the effect COVID-19 has had and will continue to have on the Company’s operations and financial performance, the extent of which is not currently known, the Company is temporarily suspending guidance for 2020."

    Bitcoin's price has been dropping since February from levels above $10,000, making it hard for the mining industry to return a profit. On March 3, wider market turmoil brought on by the growing coronavirus outbreak prompted a crash to below $4,000. Prices have since regained poise and are around $6,660 at press time.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.