Stronghold Digital, a leading Bitcoin mining firm, has announced a new two-year hosting agreement with Cantaloupe Digital, a subsidiary of the Bitcoin application-specific integrated circuit (ASIC) manufacturer, Canaan. Under the new partnership, Stronghold Digital plans to activate 2,000 Avalon A1346 miners and 2,000 A1246 models. This will result in a total hashrate capacity of 400 petahash per second (PH/s) by the end of June.
The move puts Stronghold in line with other mining companies that are also expanding their fleets in 2023 with additional ASIC rigs. As part of the agreement, Stronghold will receive 50% of the Bitcoin (BTC) mined by the Canaan Miners. Additionally, Canaan will make payments to Stronghold equal to 55% of the net cost of power at the Panther Creek plant, calculated on a monthly basis in dollar-per-megawatt-hour terms.
According to Greg Beard, chairman and CEO of Stronghold, the latest move will allow the company to fully utilize the capacity of its Panther Creek data center. While the company has emphasized its necessary deleveraging efforts over the last ten months, it thinks that the most meaningful measure of its work is the capital efficiency of its mining fleet today.
The Stronghold news coincides with Blocksbridge Consulting publishing research on April 29, 2023, indicating that the cost of producing Avalon miners has decreased. According to an analysis of Canaan’s annual report, the cost of goods sold (COGS) for each generation of Avalon bitcoin ASICs, from the A7 to A13 series, has dropped from $50 per terahash per second (TH/s) to $12 per TH/s.
Meanwhile, Bitcoin miners have had a more successful year in 2023 compared to 2022. The price of Bitcoin (BTC) has been higher this year, and despite five consecutive difficulty increases, miners experienced a 1.45% decrease on Thursday.
Overall, the partnership between Stronghold Digital and Cantaloupe Digital is expected to increase Bitcoin mining capabilities and bring in more revenue for both companies.