Key Events Update: Purchased Bitcoin Mining Machines, Transitioned Mining Power, Announced Investments, and Launched Update to Smart Energy System



KEY POINTS
  • On October 12, 2021, CleanSpark announced the purchase of 4,500 units of Antminer S19 bitcoin mining machines funded partially by CleanSpark’s bitcoin holdings. The purchase will increase the computing power by ~450 PH/s, equivalent to almost 45% of the current computing power, and is inline with increasing revenue by converting CleanSpark’s bitcoin holdings into miners. The machines are expected to be delivered by July 2022.
  • On September 27, 2021, CleanSpark moved all of its computing power of over one exahash (EH/s) to Foundry USA Pool. This amount of power is generated by more than 10,000 of the latest bitcoin mining machines. The company will continue to deploy more machines to reach 2 EH/s by 2021 and 3.2 EH/s by Fall 2022. The move will contribute to the decentralization of the mining pool, helping the overall bitcoin network.
  • On September 16, 2021, the CleanSpark collaborated with Partnership Gwinnett and announced ~$145 million of capital and human investment in its data center in Norcross, Georgia in the coming five years. The investment is comprised of $132 million investment in equipment and hardware, $7.5 million in property, $4.1 million in people, and the creation of 20 skilled and highly skilled jobs. In addition, CleanSpark plans for an additional $2 million in a power expansion project that will benefit community members in the data center vicinity. CleanSpark purchased a Sprint/Nextel data center for $6.55 million in August 2021 to start a 100% carbon-neutral new mining operation.
  • On August 19, 2021, CleanSpark rolled out a smart residential microgrid solution. CleanSpark also announced an update to mVoult, the smart energy system and its related mobile app designed for residential and small business uses.
  • Our prior content on CleanSpark can be accessed HERE.
OUR INSIGHTS

The Opportunities

The market for microgrids is in a long-term secular growth trend, and CleanSpark is well-positioned to capitalize on this as it offers a differentiated, vendor agnostic software and hardware solution that provides significant ROI for customers. Additionally, CleanSpark is focused on scaling its bitcoin mining operation using ~100% low carbon energy and believes this business can contribute $30-40 million in revenue in FY21 and over $325 million in annualized revenue by September 2022. Currently, CleanSpark contributes ~1% of the global bitcoin capacity.

The Obstacles

The company is a smaller player in an industry dominated by much larger, well-capitalized competitors. CleanSpark has proven its ability to compete effectively but will need to continue to expand its sales network and ensure its technology-agnostic software platform evolves with the industry. On the bitcoin side of the equation, an increase in mining difficulty rates would reduce the company’s bitcoin yield and associated revenue, and bitcoin price fluctuations would impact the profitability of the operation.

On October 12, 2021, CleanSpark announced the purchase of 4,500 units of Antminer S19 bitcoin mining machines funded partially by CleanSpark’s bitcoin holdings. The purchase will increase the computing power by ~450 PH/s, equivalent to almost 45% of the current computing power, and is inline with increasing revenue by converting CleanSpark’s bitcoin holdings into miners. The machines are expected to be delivered by July 2022.

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