Singpore-based Bitcoin miner BitFuFu has announced plans to acquire a majority stake in an 80-megawatt (MW) crypto-mining facility in Ethiopia.
According to the firm, this move is expected to help offset the 170% surge in production costs the company faced over the past year, which led to a 75% drop in net profits.
Notably, the acquisition marks a significant shift in BitFuFu’s strategy as the company moves from an asset-light approach—where third parties hosted its mining operations—to direct ownership. By acquiring the Ethiopian facility, BitFuFu will increase its total hosting capacity to over 600 MW, with 13% now under its direct control.
BitFuFu plans to implement technological upgrades at its site in Ethiopia to improve energy efficiency and mining capacity. The company is planning to install the latest Bitmain S21-series miners at the facility, which is expected to increase the mining capacity by 4.6 EH/s (exahashes per second). With the site’s power costs averaging below $0.04 per kilowatt-hour, BitFuFu anticipates a reduction in overall Bitcoin production expenses, leading to improved profitability.
“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,”
said BitFuFu CEO and Chairman Leo Lu.
The company also stated that it is eyeing further acquisitions to expand its global footprint and boost operational capacity.
The move comes as part of BitFuFu’s broader strategy to cut costs and strengthen its competitive position in the Bitcoin mining industry, which has been hit hard by rising expenses. According to data from analytics firm Bitbo, revenue of Bitcoin miners’ generally dropped to to an 11-month low $827.56 million in August 2024.
In Q2 2024, BitFuFu saw revenues climb 70% to $129 million compared to the previous year, but net profits plummeted from $5.1 million to $1.3 million due to escalating production costs.
To counter these issues, some mining companies are diversifying into AI and high-performance computing. This pivot could unlock $38 billion in value by 2027, according to VanEck’s head of digital assets research, Matthew Sigel.
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