Bitfarms, a prominent Bitcoin mining company, recently announced an acceleration of its hosting agreement with Stronghold Digital Mining. Originally set for December 2024, the deal will now bring an additional 2.2 exahashes per second (EH/s) of computing power online in October 2024, two months ahead of schedule.
Deployment of 10,000 New Miners
As part of the agreement, 10,000 Bitmain T21 mining machines will be deployed at Bitfarms’ Panther Creek facility in Pennsylvania. Operations are slated to begin on October 1, 2024. Ben Gagnon, CEO of Bitfarms, expressed enthusiasm for the potential of the Pennsylvania sites, noting that the locations would play a pivotal role in diversifying the company’s business operations beyond Bitcoin mining.
Gagnon explained that the Pennsylvania facilities offer benefits such as:
- Access to energy trading opportunities
- Competitive power costs
- High-performance computing (HPC) and artificial intelligence (AI) capabilities
He added that Bitfarms looks forward to completing its acquisition of Stronghold Digital Mining, which will help enhance long-term shareholder value by reducing dependence on Bitcoin mining.
Profit-Sharing Agreement with Stronghold
Under the terms of the deal, Bitfarms will pay Stronghold a fee equivalent to 50% of the profits generated from the miner hosting agreement. This contract will renew annually, with either party having the option to terminate the agreement at the end of each term.
Riot Platforms Challenges Stronghold Acquisition
Bitfarms’ acquisition of Stronghold Digital Mining has come under scrutiny from Riot Platforms, its largest shareholder. Riot issued an open letter to Bitfarms’ shareholders on September 3, 2024, urging corporate governance changes and calling for the election of two independent board members.
Riot’s letter criticized the Stronghold acquisition, labeling it “dilutive” to shareholder value and accusing Bitfarms of paying more than what competitors were willing to offer for the company. Riot further argued that the deal was an attempt by the current board to “entrench” itself.
Bitfarms Defends the Acquisition
In response, Bitfarms postponed its special shareholders meeting from October 29 to November 6, 2024, to allow more time for the Special Committee to review and respond to Riot’s demands. The company defended its acquisition of Stronghold, arguing that the deal would help diversify its energy portfolio and strengthen its presence in the U.S. market. Bitfarms also claimed that Riot’s proposed board changes were driven by its own interests rather than those of all shareholders.
