Bitcoin Mining Giant Bitfarms Acquires Stronghold Digital Mining

JAKARTA - Bitfarms Ltd., one of the big names in the Bitcoin mining industry, has acquired Stronghold Digital Mining Inc. in transactions worth around $125 million using shares. This deal comes amid intense competition with Riot Platforms Inc., which previously tried to acquire Bitfarms.

According to the announcement released, Stronghold shareholders will receive 2.52 Bitfarms shares for each share they own, representing a premium of about 70% of Stronghold's volume-weighted average price in Nasdaq for 90 days until August 16. The transaction also includes a debt of 50 million US dollars (approximately Rp800 billion) to be borne by Bitfarms.

The move aims to strengthen Bitfarms mining capacity by increasing access to energy through Stronghold, which has its own power plant and is connected to local power grids. Stronghold uses coal to generate the energy required in its mining operations, so it is expected to support the operational expansion of Bitfarms.

This acquisition coincided with Riot Platforms' efforts to offer $950 million to buy Bitfarms, an offer rejected in April. In response, Bitfarms implemented a "poison election" strategy to counter the takeover effort and has scheduled a special shareholder meeting on October 29 to discuss Riot's efforts to replace three board members.

In its financial report, Bitfarms recorded revenues of US$41.5 million (approximately Rp664 billion) for the second quarter of this year, while Stronghold suffered a loss of US$21.3 million (approximately Rp340 billion) with revenues of US$19.1 million (approximately Rp305 billion). Riot, which is one of the largest Bitcoin mining companies in the world, recorded revenues of US$70 million (approximately Rp1.1 trillion) in the same period.

This acquisition also comes amid challenges facing the crypto mining sector after the Bitcoin halving event, which reduced daily mining rewards. Miners are now trying to expand their capacity through acquisitions to deal with the impact of reducing the prize.

Riot revealed in July that its hashrate increased by 50% between May and June this year, reaching 22 exahashes per second (EH/s). This figure jumped 106% compared to the 10.7 EH/s recorded last year. Riot also recorded a 19% increase in Bitcoin production in June, although that number is still down 45% compared to 2023. Currently, Riot holds 9,334 BTC.