Bitcoin miner Bitfarms Ltd (NASDAQ: BITF) (TSE: BITF) closed its acquisition of Stronghold Digital Mining, which it anticipates will increase its energy capacity and positions.
According to Monday’s announcement, the acquisition will also give Bitfarms the opportunity to introduce artificial intelligence options alongside its usual bitcoin operations.
With the Stronghold acquisition, Bitfarms grows its energy portfolio to 623 megawatts under management. This includes 165 MW of active generation capacity and an additional 142 MW of immediately available import capacity.
The deal also secures a 1.1-gigawatt growth pipeline in Pennsylvania, providing Bitfarms with significant power infrastructure to support both Bitcoin mining and AI-driven computing.
According to the company, Bitfarms’ acquisition supports its broader goal of expanding in North America. The company also now holds 80 per cent of its energy portfolio in North America, with the remaining 20 per cent spread internationally.
Additionally, Bitfarms has identified opportunities to develop two power campuses totaling nearly one gigawatt for AI and high-performance computing (HPC). Strategic partners, including WWT and ASG, are prioritizing Stronghold’s sites for potential AI-related conversions.
“The completion of this strategic acquisition further expands our U.S. footprint and makes us the industry leader in the Pennsylvania-New Jersey-Maryland (PJM) market,” said Ben Gagnon, CEO of Bitfarms.
Bitfarms adds nearly 1 Exahash Under Management through existing hosting agreements with Canaan, featuring a 50 per cent profit split. This increases Bitfarms’ total EHuM to 18, further enhancing its self-mining capabilities. The previously announced Stronghold hosting agreements have now transitioned into Bitfarms’ self-mining operations, streamlining efficiency.
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The acquisition is a turning point in its US strategy
The acquisition structured as a stock-for-stock merger saw Stronghold shareholders receive 2.52 shares of Bitfarms for each share they owned. In total, Bitfarms issued approximately 59.7 million common shares and 10.6 million warrants as part of the transaction.
Additionally, Bitfarms reportedly paid approximately USD$44.5 million at closing to settle Stronghold’s outstanding loans.
Bitfarms’ acquisition of Stronghold Digital Mining marks a turning point in its U.S. strategy. The expanded energy portfolio and increased mining capacity provide a strong foundation for growth, particularly in AI and HPC applications. As the company integrates Stronghold’s assets, it aims to leverage its expertise and financial stability to drive long-term investor value.
Several cryptocurrency miners have diversified beyond Bitcoin mining into high-performance computing and colocation services as a strategic response to the evolving market and the increasing demand for computational power in various sectors. By venturing into these areas, miners can mitigate risks tied to Bitcoin’s price volatility and expand their revenue streams.
For instance, MARA Holdings inc (NASDAQ: MARA) has been exploring the integration of AI and HPC alongside its Bitcoin mining operations. They have partnered with data centers to provide colocation services, allowing other companies to utilize their infrastructure for computing needs. This move opens up additional revenue streams. It also aligns with the growing demand for high-performance computing in fields like artificial intelligence, machine learning, and data analytics.
Similarly, Riot Platforms (NASDAQ: RIOT) expanded into the colocation business through its acquisition of Whinstone US hosting facility. By offering colocation services, Riot can provide hosting for third-party miners while generating steady income from leasing space and power.
