Bit Digital, Inc. Announces Bitcoin Production and Mining Operations Update for the Third


  • We completed our fleet’s exit from China. As of the date of this press release, 100% of our fleet had arrived in North America. As of September 30, 2021, we had no miners remaining in China: 79.1% of our miner fleet was already deployed or awaiting installation in North America, and 20.9% was in transit.
  • The Company owned 27,744 miners as of September 30, 2021, with an estimated maximum total hash rate of 1.603 Exahash (“EH/s”). The 0.318 EH/s reduction in the third quarter was due to fleet repositioning, in which the Company sold or disposed of certain models (partially offset by purchases) in anticipation of purchase opportunities. The Company recognized a $0.375 million gain on miner sales, and the net sale proceeds had been reinvested into miner purchases as of the date of this press release.
  • The Company purchased 851 miners on the spot market during the quarter.
  • Subsequent to September 30, 2021, the Company signed an agreement with Bitmain Technologies Limited (“Bitmain”) to purchase 10,000 Bitcoin miners. The previously announced purchases are expected to increase Bit Digital’s maximum hash rate by approximately 1.0 EH/s. Pro forma for the announced purchases, our maximum total hash rate is expected to be approximately 2.603 EH/s.
  • The Company earned 248.36 bitcoins. The reduction from the second quarter was due to the migration program, in which a higher percentage of fleet capacity was offline while in transit to, or awaiting installation in, North America, as well as miner sales and disposals.
  • Treasury holdings of BTC and WBTC were 526.1 and 101.0, respectively, for a total of 627.1 BTC equivalent, with a fair market value of approximately $27.5 million as of September 30, 2021.
  • The Company raised $80 million of gross proceeds in a private placement with institutional investors.
  • The Company announced that Brock Pierce, Chairman of the Bitcoin Foundation, joined its Board of Directors effective October 31, 2021.

Miner Migration Completed

As a result of the State Council targeting virtual currency mining in China, we terminated all mining operations in China on June 21, 2021. Accordingly, we further accelerated our migration strategy to North America, that had been ongoing since October 2020, and completed our fleet’s exit from China during the third quarter. As of September 30, 2021, we had no miners in China: 79.1% of our fleet was already deployed or awaiting installation in North America, and 20.9% was in transit. As of the date of this press release, 100% of our fleet had arrived in North America.

Power and Hosting Update

During the third quarter, the Company signed two new hosting agreements in the United States, representing 135 megawatts (“MW”) of additional power capacity. Both are expected to be powered by a substantial component of renewable and/or carbon-free energy, contributing to our ongoing efforts to decarbonize our mining operations.

On July 22, we signed a 100 MW agreement with Digihost Technologies (“Digihost”) that is expected to be powered by approximately half renewable and/or carbon free energy sources, subject to finalizing our energy procurement strategy with Digihost. This second agreement brings our total contracted hosting capacity with Digihost to 120 MW. Digihost is expected to deliver the first 20 MW of contracted power capacity during Q4 2021. The remaining 100 MW is scheduled for delivery during the first and second quarters of 2022.

On August 25, we signed a 35 MW hosting agreement with Blockfusion USA (“Blockfusion”) that is expected to be powered primarily from zero carbon emission energy sources.  As of the date of this press release, Blockfusion had completed the first (of four) phases of miner deployments, representing approximately 5 MW of power consumption. The remaining three phases are scheduled for delivery in Q4 2021 and Q1 2022. During the term of our agreement and for twelve (12) months thereafter, Bit Digital has a right of first refusal to match any bona fide offer from a third party to finance or acquire securities and/or assets of Blockfusion, and to receive a credit or refund of certain expenses incurred in the development of infrastructure.

As a result of these two new agreements, as of September 30, 2021, the Company had secured hosting capacity sufficient to complete the redeployment of its fleet in North America, with additional signed capacity to facilitate future fleet growth. The Company continues to evaluate additional hosting arrangements with existing and prospective new hosting partners.

Our hosting partner Compute North LLC (“Compute North”) has advised us that its delivery of 40 MW of hosting capacity that was contracted for during Q2 and anticipated for delivery in Q3 2021 has been delayed. Compute North has not yet determined updated delivery timing for this additional capacity. Pending revised delivery timing, Bit Digital expects to redirect miner deployments to other hosting partners.

Our hosting partner Link Global Technologies (“Link”) has advised us that Link’s facility in Alberta, Canada that had supplied approximately 3.3 MW for hosting our miners was required to discontinue operations as a result of a permitting dispute. Link is currently evaluating alternative sites to accommodate our miners. In the interim, pending further updates, Bit Digital expects to redirect miners formerly hosted with Link to other hosting partners.

The following table summarizes our signed hosting agreements as of September 30, 2021, and expected delivery timing based on communications with our hosting partners:

Hosting Partner

Date
Signed

Location
(State)

Expected
Power
Capacity
(MW)

% of
Total

Expected
Delivery
Timing

Compute North

 

9/9/2020

Texas

0.3

0.1%

Delivered

Link Global
Technologies

 

1/31/2021

TBD
(formerly Alberta)

3.3

1.5%

TBD

 

Compute North

 

12/30/2020

Nebraska

6.5

3.0%

Delivered

Compute North

 

1/21/2021

Nebraska

9.2

4.3%

Delivered

Other

 

2/22/2021

Georgia

0.3

0.2%

Delivered

Compute North

 

3/12/2021

TBD

40.0

18.6%

TBD

Digihost
Technologies

 

6/10/2021

New York

20.0

9.3%

Q4 2021

 

Digihost
Technologies

 

7/22/2021

New York

100.0

46.6%

Q1 to Q2 2022

Blockfusion USA

8/25/2021

New York

35.0

16.3%

Q4 2021 to Q1
2022 (1)

Total 



214.6

100.0%



(1)    Approximately 5 MW has already been delivered as of the date of this press release.

The following table summarizes our expected hosting deliveries, by quarter:

Expected Delivery Timing

Expected Power Capacity (MW)

Delivered as of September 30, 2021

21.3

Q4 2021

30.0

Q1 2022

80.0

Q2 2022

40.0

To be determined

43.3

Total

214.6

Pro forma for hosting agreements signed to date, we expect to enjoy a competitive estimated base power and hosting rate of approximately 3.6 cents per kilowatt-hour, on an annualized weighted average basis.The foregoing base power rate therefore is an estimate and relies on certain assumptions, including but not limited to estimated future energy procurement pricing, and excludes the effect of profit sharing arrangements. We achieve what we believe are attractive hosting rates, in part, by offering profit shares to many of our hosting partners. We believe that profit sharing helps align interests with our hosts, and contributes to strong performance and uptime for our hosted miners.

Bitcoin Production Update

In the third quarter of 2021, Bit Digital earned 248.4 newly minted bitcoins, a reduction from 588.4 earned in the second quarter. The reduction was due to the aforementioned miner migration, as well as fleet repositioning in which the Company sold or disposed of certain miners. Bitcoin production is expected to increase following completion of the redeployment of miners migrated from China, which is expected during the first quarter of 2022, and upon completion of announced miner purchases.

The Company’s quarterly bitcoin production since commencement of our mining operations was as follows:

Miner Fleet Update

As of September 30, 2021, the Company owned 27,744 miners, with an estimated total maximum hash rate of 1.603 EH/s, a decrease from 32,500 miners and 1.915 EH/s as of June 30, 2021. The reduction was due to sales and disposals of certain miners, partially offset by miner purchases, as further discussed below. The Company’s fleet of owned miners comprised the following models:

Model

Owned as of

September 30, 2021

MicroBT Whatsminer M21S 

16,296

MicroBT Whatsminer M20S

3,690

Bitmain Antminer S17 

3,641

MicroBT Whatsminer M10

1,938

Bitmain Antminer T3

769

Bitmain Antminer S19 Pro

605

Bitmain Antminer S17+

500

MicroBT Whatsminer M30S

261

Bitmain Antminer T17+

44

Total

27,744

Miner Purchases, Sales and Disposals

During the third quarter, we purchased 851 miners on the spot market, including 400 Bitmain S19Pro and 451 Bitmain S17 models. As of September 30, 2021, all of the newly purchased miners had already been deployed in North America.

Subsequent to September 30, 2021, we signed an agreement with Bitmain to purchase 10,000 Bitcoin miners. The total maximum purchase price is estimated at US $65,000,000 (subject to certain potential…



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