Crypto Miners Continue Raking in Bitcoin and Holding

Companies expand footprints through acquisitions, partnerships.


Blockworks exclusive Art by Axel Rangel


key takeaways

  • Hut 8 Mining, Riot Blockchain, Marathon Digital and HIVE Blockchain Technologies held nearly 19,000 bitcoin combined at the end of November
  • Riot Blockchain recently bought ESS Metron, while Marathon Digital expanded its agreement with Compute North to host more than 100,000 of its bitcoin miners

Crypto miners continue to hold the bitcoin they are producing, and some have plans to grow their businesses even more to continue building reserves. 

Some of the largest such companies in North America — Hut 8 Mining, Riot Blockchain, Marathon Digital and HIVE Blockchain Technologies — now hold roughly 18,940 bitcoins combined. The businesses continue to expand their operational footprints in an effort to increase their production capacities.

Other companies, such as Celsius Network, are looking to catch up. Celsius started its bitcoin mining business last year as a way to diversify its sources of yield, and announced an additional $300 million investment into its mining capabilities last month.    

Hut 8 Mining

Hut 8 Mining mined 265 bitcoins in November, an average of nearly nine per day, the company revealed. The total last month was up from 249 bitcoins mined in October and slightly lower than its output of 273 the month prior.

The Canada-based miner is keeping all of its mined bitcoin as part of its broader “hodl” strategy, the firm noted in a December 2 announcement. Its reserves total 5,242 bitcoin, as of November 30, and about 2,000 of its bitcoins are earning yield, according to the firm.

The value of Hut 8’s reserves as of Monday at 12 Noon ET — when bitcoin was priced at about $49,100 — was roughly $257 million.

Hut 8, in November, completed the deployment of NVIDIA chips at the company’s site in Medicine Hat, Alberta. The NVIDIA cryptocurrency mining processors mine the Ethereum network via Luxor pool and are receiving payouts in bitcoin, which equate to about two additional bitcoin per day. 

The company currently has an installed hashrate of approximately 1.7 exahash per second (EH/s). The company is on track to meet its goal of between 2.5 EH/s and 3 EH/s by the end of the year, a representative told Blockworks, and looks to reach 6 EH/s by the middle of 2022. 

The development of Hut 8’s third mining site in North Bay, Ontario, is under way, the spokesperson added. The facility, expected to be ready by the end of the year, will begin with 35 megawatts of capacity.

Riot Blockchain

Colorado-based Riot Blockchain produced 466 bitcoin in November, bringing its year-to-date total to 3,387 BTC — roughly a 260% increase over its bitcoin production over the same period last year.

Riot held 4,464 bitcoins, all produced by its mining operations, as of November 30. It has a deployed fleet of 29,095 miners with a hashrate capacity of 3 EH/s. 

The company has increased its 2022 estimated hashrate capacity to 9.0 EH/s due to a recent $33 million purchase order with Bitmain for 3,000 of its latest miner model S19XP. The delivery and deployment of these machines is expected in the second half of 2022.

Riot also announced last week that it bought ESS Metron, which designs and produces electrical equipment solutions, many of which the acquirer said are critical to deploying bitcoin mining operations at scale.

Denver-based ESS Metron has facilities that total 121,000 square feet, and the company is a key supplier to Riot’s Whinstone facility in Rockdale, Texas.

“Riot’s strategic positioning across the electrical supply chain is significantly enhanced as the company will benefit from ESS Metron’s existing relationships with leading electrical suppliers globally,” Riot CEO Jason Les said in a statement. “In addition, Riot will continue its fast-tracked expansion project as the company benefits from internalizing ESS Metron’s engineering and industry expertise.” 

Marathon Digital

Marathon Digital, a bitcoin miner based in Las Vegas, is also focused on growth. 

The company mined 196 bitcoins in November, which was down from 417.7 bitcoins in October. The sharp decrease reflects maintenance and upgrades to its power generating station in Hardin, Montana.

The miner’s existing mining fleet consists of 31,000 active miners producing roughly 3.2 EH/s. It has produced 2,712 bitcoins in the first 11 months of 2021, bringing its bitcoin holdings total to 7,649. 

The company last sold bitcoin in October 2020, and since then, has been accumulating all the bitcoin it generates.

“I think all miners believe that the price of bitcoin will go up, and by not selling bitcoin, we essentially cause the price to go up somewhat,” Marathon Digital CEO Fred Thiel previously told Blockworks

Marathon received about 15,500 ASIC miners from Bitmain in November, bringing its year-to-date total to 57,000 miners. An additional 8,477 miners are currently in transit, the firm reported.

The company recently expanded its agreement with Compute North to host more than 100,000 of Marathon’s previously purchased bitcoin miners at multiple locations, including wind and solar farms across the US.

The news follows Marathon announcing its intention in May for Compute North to host roughly 73,000 of Marathon’s bitcoin miners in Texas.

Once all 133,000 of Marathon’s bitcoin miners are deployed, the company’s hash rate will be approximately 13.3 EH/s, its blended cost of electricity and hosting will be approximately $0.042 per kilowatt-hour, and Marathon’s mining operations will be approximately 77% carbon-neutral.\

HIVE Blockchain Technologies

Vancouver-headquartered HIVE Blockchain Technologies produced 218 bitcoins in November and held a total of 1,584 as of the end of the month. 

“We are very pleased to report HIVE has continued its strong momentum following our record-breaking October production figures,” HIVE Executive Chairman Frank Holmes said in a statement. “This trend is continued in our November production, where HIVE is again generating over $280 million in annual revenue on a run-rate basis using November figures.”

HIVE also mined 2,334 ether in November, as the company stated in a December 3 news release that it believes its unique position of having a large bitcoin and Ethereum mining footprint provides investors a unique value proposition.

MicroStrategy CEO Michael Saylor, an outspoken proponent of bitcoin, said in July that there’s a “land grab” to acquire as much bitcoin as possible, noting the ultimate maximum of 21 million that will one day be in circulation. The company’s latest bitcoin buy was 7,002 bitcoins at an average price of $59,187, according to Saylor. MicroStrategy now holds about 121,000 bitcoins acquired for nearly $3.6 billion — an average price of about $29,500.

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