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Major Bitcoin (BTC) mining company Genesis Digital Assets has secured $431 million in funding to expand its industrial-scale mining operations in the United States and Nordics.
The new funding round was led by Paradigm, one of the biggest cryptocurrency investment companies backing major industry players like Coinbase and FTX. Paradigm co-founder Matt Huang has also joined Genesis Digital’s board of directors, the firm announced on Sept. 21.
Other investors include the $11 billion asset manager Stone Ridge and its Bitcoin subsidiary NYDIG and several venture capital firms and investment management firms like Ribbit, Electric Capital, Skybridge and Kingsway Capital, and FTX crypto exchange. Kingsway previously led a $125 million equity funding round for Genesis in July 2021.
Genesis Digital CEO and co-founder Marco Streng noted that the new funds will help the company to continue expanding operations with a goal to reach 1.4 gigawatts in mining capacity by 2023. “The capital raised from this round will be used to expand our Bitcoin mining operations in locations where clean energy is easily accessible,” he added.
One of the largest Bitcoin miners in the United States, Genesis Digital has been actively increasing its mining power recently, accumulating more hardware for mining the cryptocurrency. In late August, the firm purchased 20,000 new BTC mining devices from Chinese mining giant Canaan, signing an agreement to buy up to 180,000 additional miners in the future.
Related: Bitcoin mining estimated to represent 0.9% of global carbon emissions in 2030
Genesis Digital’s mining capacity has been steadily increasing recently, surging from around 140 megawatts as of July 2021, or a total hash rate of 2.6 exahashes (EH/s), to over 170 megawatts, or 3.3 EH/s as of September.
According to the company’s website, Genesis’ data center had a capacity of over 143 megawatts as of July 2021, or a total hash rate of 2.6 exahashes (EH/s), which is more than 2.6% of the global Bitcoin mining hash rate. The company expects to add another 8.6 EH/s in the next 12 months.
The round led by investment firm Paradigm will fund the expansion of Genesis’ bitcoin mining operations in the U.S. and Nordics.
Bitcoin miner active since 2013 Genesis Digital Assets announced today the raise of $431 million to fund the company’s expansion plans. The round, led by investment firm Paradigm, comes less than two months after the miner’s previous funding round of $125 million.
Former investors also joined the funding round, including NYDIG, Stoneridge, FTX, Ribbit, Electric Capital, Skybridge, and Kingsway Capital, the $2 billion U.K.-based private equity fund that solo-led the previous round in total. Paradigm’s co-founder and managing partner Matt Huang, who joined the Genesis board of directors, commented on the announcement.
“Over nearly a decade, GDA’s team have built what we regard as the most impressive bitcoin mining operation in the world,” said Huang. “They have everything it takes to continue to scale their operations and make bitcoin mining even more efficient, and we’re thrilled to support their mission.”
The newest funding round, one of the largest sums announced by bitcoin mining companies, will empower Genesis to fulfill its many expansion plans. The company said it expects to increase its hashrate capacity significantly over the next 12 months.
The bitcoin miner’s current data center capacity of around 170 megawatts translates into a total hashrate capacity of 3.3 exahashes per second (EH/s), which the company said it plans to increase to nearly 11.9 EH/s in the next year. And the recent abundant investments might enable Genesis to achieve its wild expansion plans.
“As we work towards our goal of bringing 1.4 gigawatts online by 2023, the capital raised from this round will be used to expand our bitcoin mining operations in locations where clean energy is easily accessible,” Genesis CEO and co-founder Marco Streng said. “We’re excited to have strategic investors on board and look forward to executing on our mission together.”
According to the release, Genesis Digital Assets has been a bitcoin mining company since 2013, having built over 20 industrial-scale bitcoin mining farms and mined over $1 billion in bitcoin. In April, Genesis purchased $93 million worth of Canaan ASICS and followed that up with another purchase in June for 10,000 bitcoin mining rigs from the same manufacturer.
Bitcoin’s (BTC) rapid recovery above $46,000 has renewed calls for a $100,000 BTC price by the end of 2021, while the effects of China’s crackdown on the mining industry are slowly beginning to fade as the Bitcoin network hash rate shows signs of recovery.
One of the side benefits of China’s crackdown is that it has lowered the barriers of entry into the Bitcoin mining space, which has been shown to provide profits in both bull and bear markets.
Bitcoin mining is one of the few ways that investors can acquire BTC without directly purchasing it from the market, and is quickly becoming an industry dominated by big money interests that can afford the electricity costs and upkeep required to run a mining operation.
Here are some options available for the average crypto stacker to acquire more BTC through cloud mining contracts, crypto lending platforms and centralized exchanges (CEX).
The cloud mining industry has been around since Bitcoin’s early days, and it offers those interested in mining Bitcoin who lack the space, equipment and electricity required an opportunity to outsource their production.
Some of the more well-known companies that offered cloud mining services include Genesis Mining and HashNest, but demand for their services has exceeded their capabilities, resulting in all their Bitcoin mining contracts being sold out.
One of the current mining operators with available contracts is Shamining, a company based in the United Kingdom that has been in operation since 2018, and claims to have data centers worldwide with locations in California, Mexico, Cape Town, South Africa and London, England.
Through this service, users can rent mining equipment and pay for the associated costs of operating the units, while the company handles the physical housing, operation and maintenance. Once operational, generated proceeds can be withdrawn to a Bitcoin wallet specified by the user.
Current rental contracts include two options for GPU miners, which cost around $283 for 23,580 gigahashes per second (GH/s) or $1,066 for 94,340 GH/s, and another option for ASIC miners with a current cost of $2,571 for 235,849 GH/s of mining power.
All contracts indicate that they have profitability that starts at 143%.
Another option that allows users more flexibility regarding the parameters of their mining contract is ECOS, a company that grew out of the Free Economic Zone located in Hrazdan, Armenia, and has been in operation since 2017.
As seen in the graphic above, a 50-month contract for 9 terahashes per second currently costs $1,668 and is projected to result in a profit of 272.82% at a BTC price of $70,000.
It should be noted that all cloud mining services offer warnings about the high risks involved and that no level of profit can be guaranteed. This could be due to a variety of circumstances, including fluctuating electricity prices, Bitcoin price volatility and advances in mining technology that lead to substantial increases in mining difficulty, which renders older equipment obsolete.
Related: Bitcoin mining difficulty jumps a second time as miners settle offshore
A more traditional option available for hodlers to acquire more Bitcoin by utilizing their current stack that doesn’t require any further investment, like mining, is through lending services that offer a yield on deposits.
Nexo and Celsius are two of the most well-known lending platforms that allow cryptocurrency users to borrow funds against their crypto holdings or earn rewards for deposits.
At the time of writing, Celsius offers users an annual percentage yield (APY) of 6.2% for Bitcoin deposits, and Nexo offers a standard return of 5% on flexible-term deposits, while fixed-term deposits that go a minimum of one month can earn 6%.
A third option that provides users with a 4% return on BTC deposits is BlockFi, a crypto asset service provider that offers interest accounts and crypto-backed loans and has also recently launched a Bitcoin rewards credit card.
Related: What bear market? Investors throw record cash behind blockchain firms in 2021
Several centralized exchanges also offer Bitcoin holders a return on their BTC deposits, albeit at lower rates than those mentioned above.
Binance, the largest CEX in the crypto ecosystem, offers users an estimated APY of 0.5%, while third-ranked exchange Huobi offers 1.32%.
The best yield offered on a United States-based CEX can be found on Gemini where users can earn 1.65% on their deposits.
KuCoin offers a more free-market approach to BTC lending where lenders can set the parameters of the loan terms, choosing between contract lengths of seven days, 14 days and 28 days while getting to set their own daily interest rates to compete with other lenders on the market.
The lowest rate currently offered on KuCoin is an annual rate of 1.82% on a seven-day contract.
As seen in the data provided, there are multiple ways to increase a Bitcoin stack as opposed to simply buying on the open market, but they are becoming scarcer as time progresses.
With large institutions, energy companies and governments beginning to develop Bitcoin mining infrastructures, smaller market participants are increasingly being squeezed out as cloud mining facilities are unable to keep pace with demand.
Bitcoin lending is increasingly looking like the main way BTC holders will be able to earn a yield paid in BTC in the future, while Bitcoin-backed loans offer a way for hodlers to access the value of their tokens without the need to sell and create a taxable event.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
A survey published today by Genesis Mining reveals that while the majority of Bitcoin investors are sold on the crypto’s ability and potential to replace gold as a safe-haven, few respondents are as confident of hitting $50,000 per BTC by 2030.
As Bitcoin exploded towards the end of 2020 and recorded gains of 160% for the year, news sites and Twitter feeds have reported an overwhelming bullish sentiment for the flagship cryptocurrency with projections ranging from $50,000 – $500,000 per BTC in the next few years. But a shock survey from Genesis Mining reveals that not everyone is so sure.
Institutional mining platform, Genesis Mining, conducted a survey to quantify the current Bitcoin investment sentiment. 1,000 US-based investors were surveyed revealing that although the majority were sure the BTC price would continue to appreciate—only 17% are betting on $50,000 BTC and only around 3.5% of respondents believe that the Bitcoin price can reach $500,000 by 2030.
The survey, however, found strong support for Bitcoin’s case as a store of value with two-thirds tipping BTC as a better long-term hold than the US dollar. Over 50% also tipped that Bitcoin will replace traditional safe-haven assets like gold and real estate within the next ten years.
Per the survey:
“Should legacy economic systems collapse or experience shocks, Bitcoin is seen as a hedge against loss of personal wealth.”
A Look At The Findings
Genesis survey reveals that the overall sentiment for Bitcoin remains bullish in majority, but with only 17% predicting $50,000 by 2030 the findings indicates that that overall the respondents do not believe Bitcoin can grow another 160% in the next ten years—despite Bitcoin making an almost identical price percentage gain in just the last few months.
Just over half of BTC investors surveyed estimate that the Bitcoin price will be at $20,000 per coin or less by 2030—with one third predicting $10,000 or less and just over 10% expecting a crash to around $1000 in the same period.
A further 17% predicted that Bitcoin’s price would actually fall over the next decade, while one-sixth of respondents did not feel confident in speculating on BTC’s long-term price performance.
The results reveal that over 30% of respondents are expecting the Bitcoin price to move sideways or decrease over the next ten years due to regulatory pressure and around 20% are expecting overreaching government bans.
Nearly one-fifth of the respondents also expect Bitcoin’s dominance may be usurped by another cryptocurrency or even a central bank digital currency (CBDC) and nearly 10% of participants do not believe there will ever be any real-world utility for BTC.
From the findings, one-tenth of the most bullish respondents tipped Bitcoin would be worth six-figures by 2030, and half of these expect BTC prices to exceed $500,000. A more than a quarter of these bullish respondents are tipping that Bitcoin adoption will be driven by the waning trust in fiat currency and central bank monetary policy as well as a period of economic downturn.
While the sample size is not indicative of the entire global Bitcoin investor base, the revelations in the findings may serve as shock to most taking part in the current bull market. While the sentiment may seem overly bearish, Genesis highlighted in the publication:
“It is important to note that these are Bitcoin investors. By the very fact that they are invested in Bitcoin, they are bullish, at least to some extent. Yet, as the price of Bitcoin continues to trend upwards, bullishness has become increasingly synonymous with reality.”
Image source: Shutterstock
A survey from Genesis Mining has found that most Bitcoin investors aren’t expecting a $50,000 BTC price in 2030 — although 3.5% of respondents tipped prices exceeding $500,000.