Celsius to Invest Additional $300M in Bitcoin Mining
CEO says expanding capabilities in the space will help the platform source more yield for its users as AUM grows.
key takeaways
- The plans to expand mining operations in North America follow Celsius’s $200M investment in June, which included equity positions in Core Scientific, Rhodium Enterprises and Luxor Technologies
- Celsius has paid more than $1 billion in digital assets to its community of 1.2 million users since its 2018 launch
Celsius Network is investing an additional $300 million into its bitcoin mining capabilities as the platform’s assets under management continue to grow.
Celsius began building its mining business last year as a way to diversify its sources of yield, CEO Alex Mashinsky told Blockworks in an interview.
Beijing’s crackdown on the country’s mining industry earlier this year resulted in a portion of the hashrate owned by local companies moving to North America. Some of the continent’s largest companies, such as Marathon Digital and Hut 8 Mining have been bolstering their operations and building up their bitcoin reserves.
“Unlike most of the miners who are trying to generate profits in dollars … Celsius is basically trying to earn yield in bitcoin for our community,” he said. “…While a lot of people use the name lending and borrowing, really we are a yield factory.”
The business will continue to scale its mining operations based on the amount of assets managed, Mashinsky added. Celsius’s AUM has grown to $28.6 billion.
Celsius provides yield on 46 different assets – including Bitcoin, Ethereum and stablecoins – with rewards paid out weekly. It generates yield by lending to institutions, exchanges and individuals, as well as through its staking, decentralized finance and mining operations.
Since launching in 2018, the platform has paid more than $1 billion in digital assets to its community of 1.2 million users, Celsius announced on Nov. 1.
The CEO took aim at certain crypto companies who charge users fees, noting that Celsius differentiates itself by charging fees to exchanges, for example, that then goes to its users.
“We don’t spend hundreds of millions of dollars putting our name on stadiums or whatever,” he said, alluding to Crypto.com’s latest deal to rename the home of the Los Angeles Lakers. “We just pay hundreds of millions of dollars to our community in yield.”
Continued growth
The latest investment follows Celsius’s $200 million investment in June that included buying mining equipment. A portion of the funds also secured positions in Core Scientific, a company focused on customizable infrastructure and software solutions for blockchain networks, as well as Texas-based mining company Rhodium Enterprises and hashrate-based software company Luxor Technologies.
Celsius in July confirmed a $54m investment in Core Scientific, which announced at the time its intent to go public through a $4.3B merger with Power & Digital Infrastructure Acquisition Corp. A large part of Celsius’s mining footprint exists within the carbon-neutral bitcoin miner, Mashinsky noted.
Celsius has about 22,000 Bitcoin application-specific integrated circuit (ASIC) miners, most of which are Bitmain’s AntMiner S19 series.
“This additional investment includes us ordering more machines and building more facilities in North America to accommodate the growth that we project – basically the coins we’re going to need to deliver for our community.”
A Celsius spokesperson declined to comment on where exactly in North America the business could look to expand its operations.
The $300 million bitcoin mining investment comes after Celsius closed a $400 million investing round in October led by West Cap and Caisse de dépôt et placement du Québec (CDPQ), bringing its valuation to more than $3 billion.
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