BitFuFu boosts Bitcoin mining with first physical facility in Ethiopia

Cloud Bitcoin miner BitFuFu has acquired its first brick-and-mortar mining facility. The company is calling the acquisition of an 80-megawatt (MW) facility in Ethiopia the start of its infrastructure diversification. The value of the deal was not disclosed.

Nasdaq-listed, Singapore-based BitFuFu had 25 mining facilities as of June 30, all of which were hosted by third parties and the majority of which were located in the United States. Other facilities are located in Portugal and Indonesia. 

Out of the cloud, down to Earth

The company will boost its capacity from 522 MW to over 600 MW with the new facility, which it intends to upgrade. The deployment of Bitmain S21 application-specific integrated circuit (ASIC) miners will potentially add 4.6 EH/s to its mining capacity. 

In the second quarter of 2024, BitFuFu’s capacity under management amounted to 24.7 EH/s. CEO Leo Lu said in a statement:

“This acquisition is a critical milestone as we work to vertically integrate and transition towards a more diversified and resilient portfolio of Bitcoin mining sites.”

“We can capitalize on lower energy costs to reduce Bitcoin production expenses, expand our operational capacity, and enhance profitability,” through the acquisition, he added.

Energy costs at the facility average below $0.04 per kilowatt-hour, which will reduce BitFuFu’s cost per Bitcoin (BTC). BitFuFu’s mining expenses had risen 168% year-on-year as of Q2 2024.

Related: Ethiopia makes data center deal with Hong Kong company, may start mining

Prospering in a complex market

Surging energy prices and the fourth Bitcoin halving cut deep into miners’ profits. Many miners have looked at computing diversification, moving into artificial intelligence and high-performance computing.

Miners with healthy cash reserves have benefitted from the market shakeup to double down on mining. BitFuFu was one of the miners to benefit from this strategy, increasing Q2 revenue by almost 70% year-on-year to $129.4 million.

BitFuFu was founded by executives of Chinese hardware producer Bitmain with an early investment from that company. Bitmain remains BitFuFu’s strategic partner. Bitdeer is also a spinoff of Bitmain.

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