The recent surge in BTC production costs to record levels has significantly squeezed the profits of crypto miners. Wall Street-listed Bitcoin (BTC) miner BitFuFu (NASDAQ: FUFU) has announced its plans to acquire a majority stake in an 80 MW capacity crypto mining facility in Ethiopia.
BitFuFu, like other companies in the industry, has been hit hard by the crypto crisis. Its costs have increased by 170%, and its revenues have dropped by 75% as a result. After this investment, BitFuFu will have a hosting capacity of over 600 MW.
One of the key advantages of the Ethiopian facility is the lower cost. With an expenditure of only $0.04 per kilowatt, this facility is expected to positively impact the company’s average cost and profit balance.
BitFuFu’s CEO and Chairman, Leo Lu, commented on the acquisition:
“This acquisition is a critical milestone as we work to vertically integrate and transition towards a more diversified and resilient portfolio of Bitcoin mining sites. As we integrate this facility into our global infrastructure, we can capitalize on lower energy costs to reduce Bitcoin production expenses, expand our operational capacity, and enhance profitability.”
At the same time, BitFuFu plans to increase its technological investments to reduce losses. The company’s net profit in the second quarter of 2024 was $5.1 million, but due to the recent cost issues, it has fallen to $1.3 million.
The total funds in the entire sector have dropped to $827.56 million in recent years. Major companies in the crypto mining sector are turning to AI and high-performance computing technologies to combat this situation.
