CleanSpark Takes Advantage of Bear Market to Acquire Mining Rig Contracts

The miner also partnered with TMGcore to expand its immersion-cooled bitcoin mining infrastructure.

AccessTimeIconJun 16, 2022 at 1:00 p.m. UTC
Updated May 11, 2023 at 5:42 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

CleanSpark (CLSK), is taking advantage of the bear market and falling prices for bitcoin mining rigs by buying existing purchase contracts from another miner for 1,800 Antminer S19 XP computers.

The Las Vegas-based, sustainable bitcoin miner said in a statement that the machines will add over 252 petahashes per second (PH/s) of hashrate to CleanSpark’s bitcoin mining capacity, once fully deployed. The bitcoin mining specific computers, called ASICs, will start arriving at CleanSpark's facilities in August, and shipping will continue through the next six months. The miner currently has 25,000 latest-generation bitcoin miners with a hashrate over 2.5 EH/s.

  • Bitcoin Miner Bitfarms Warns of Default
    04:20
    Bitcoin Miner Bitfarms Warns of Default
  • How Bitcoin Mining Got 'Even More Competitive' In 2022: Analyst
    01:17
    How Bitcoin Mining Got 'Even More Competitive' In 2022: Analyst
  • Stronghold Digital CEO on State of Bitcoin Mining Amid FTX Fallout
    07:43
    Stronghold Digital CEO on State of Bitcoin Mining Amid FTX Fallout
  • Bitcoin Could Rally to $63K by March 2024: Matrixport
    01:11
    Bitcoin Could Rally to $63K by March 2024: Matrixport
  • The miner took advantage of the recent market conditions, where a sell-off in bitcoin prices has led to a decline in ASICs prices. A tough capital market and difficulty in securing power purchase agreements by miners have also caused an excess supply of ASICs – which cannot be plugged in to mine bitcoins – contributing to the lower prices of the mining rigs.

    Due to lack of funding, miners have not been able to fulfill previous orders of mining rigs for which they have paid deposits. “With our research that we have done, we found that a sample set of public miners still owe $1.9 billion this year, for the ASIC purchases that they've committed to,” said Galaxy Digital’s head of mining Amanda Fabiano during a panel discussion at Consensus 2022 in Austin, Texas.

    The current conditions have given CleanSpark and other miners an opportunity to buy mining rigs at lower prices for expanding their operations. “We were able to secure the contract at an exceptional price because of our strategic relationships and the unique circumstances that current market conditions have created,” CEO Zach Bradford said.

    The contract was brokered by Cryptech, a U.S. based supplier of cryptocurrency mining machines and longtime partner of the miner, according to the statement.

    CleanSpark didn’t specify the prices for the contracts but a source close to the matter said that it has paid less than the spot prices for the rigs. The prices for latest generation ASICs have traded around $60 per terahash ($/TH), the lowest since July last year when China banned mining, according to Luxor Technologies’ Hashrate Index data. The prices topped just over $100/TH in December, the data suggests.

    CleanSpark also announced a partnership with TMGcore, a developer of high performance computing solutions, to expand its immersion-cooled infrastructure for bitcoin mining. The deal includes 257 units of TMGcore’s proprietary immersion cooled tanks that are specifically designed to improve the performance of mining machines while substantially decreasing their failure rates over long-term use, according to the statement.

    In liquid immersion cooling, which is an alternative to traditional air-cooling systems, mining machines are fully immersed in a synthetic hydrocarbon compound liquid that has no electrical conductivity and is fully biodegradable. The specialized liquid can reduce heat, power consumption and noise stemming from the computers as well as prolong the lifespan of the machines, allowing miners to maximize profit.

    Each tank fits 28 Antminer S19j Pro mining machines and the units will be deployed in batches at CleanSpark’s College Park, Ga., property and other locations. The partnership also provides CleanSpark with 2 megawatts (MW) of colocation capacity at TMGcore’s immersion-cooled mining facility in Plano, Texas.

    In December, CleanSpark bought 20MW immersion cooling infrastructure for its Norcross, Ga., bitcoin mining facility. Eight of the datacenter's 20MW capacity are already fully operational, while the remaining 12 MW are expected later this year, according to Wednesday’s statement.

    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.

    Aoyon Ashraf

    Aoyon Ashraf is managing editor with more than a decade of experience in covering equity markets


    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.