Key takeaways:
- Celsius’ $300 million allotment puts the firm’s total investment into Bitcoin mining at over $500 million
- The North American crypto mining sector is booming since China effectively eradicated its hashrate capacities in a series of clampdowns
- BTC miners can stake their hashrate to secure BTC loans by Celsius
Celsius Network, a centralized provider of cryptocurrency loans, has announced a $300 million investment into Bitcoin (BTC) mining equipment and related services. With over $200 million invested in BTC mining facilities in North America (NA) earlier in the year, Celsius has now allocated more than $500 million to complement its lending business with a Bitcoin mining venture.
Celsius is capitalizing on the North American BTC mining boom
Speaking to The Block, Celsius CEO Alex Mashinsky told the crypto news outlet that the company would use the newly allocated funds to expand its hash rate production in NA over the coming months. The CEO noted that the firm currently owns about 22,000 BTC ASIC miners and plans to buy the newest Bitmain’s AntiMiner S19XP models with a throughput of 140 terahashes per second (TH/s).
Investment into the North American BTC mining infrastructure has picked up the pace drastically following China’s crackdowns on crypto mining and the cryptocurrency industry in general, and Celsius is riding the wave of a new trend.
In the months following a series of clampdowns on the mining industry, China’s hash rate production has fallen to zero, according to data collected by the Cambridge Bitcoin Electricity Consumption Index (CBECI). According to analytics firm Blockchain.com, despite the former mining superpower being entirely out of the picture, the total hash rate output has recovered close to its all-time high in record time.
Miners looking for a new home have in large numbers chosen the United States as their preferred destination due to easy access to cheap energy and especially the ability to select from a myriad of renewable energy sources. By the end of August 2021, US miners’ average monthly hashrate share has increased to 35.4%, up more than 100% since earlier in the year.
Mashinsky is aware that the competition is getting stiffer in the crowded NA market, which is why Celsius is making investments that will secure its position as a leading crypto mining company. “A lot of people that are buying machines, they think the competition is just not gonna be there, but obviously now there are a lot more participants, more players, so you really have to be good at this business,” the CEO of Celsius elaborated.
In addition to mining a traditional mining operation, Celsius is also providing access to Bitcoin loans in return for hash power. Mashinsky went on to explain:
“We are catering to miners who don’t want to sell their bitcoin and we lend them against their bitcoin or their hash power so they can basically send us bitcoin [as collateral] when they mine it.”
Celsius’s crypto lending core business grew immensely following its founding in 2017. As of November 12, the company has processed $8.2 worth of loans, controls more than $28.6 billion worth of community assets by more than 1 million strong user base. Celsius announced it had raised over $400 million in its latest funding round in mid-October, good for a $3 billion valuation.
