How Crypto Miners Must Adapt in 2024

Bitcoin underwent its fourth “halving” earlier this month, and while this typically results in a bullish spike in prices, we believe that this year will see a major reckoning in this digital space–and the winners will be those with the lowest all-in costs and the smartest energy setup. 

We believe that the path to profitability is paved by energy sources, with crypto mining now under intense scrutiny for threatening the stability of the grid and, in some cases, causing electricity prices to skyrocket on the excessive demand.  

This is the “death of dirty miners”, Rob Chang, CEO of Gryphon Digital Mining, a maverick in this segment that has gone carbon-neutral and boasts one of the lowest all-in mining costs in the industry, told Bloomberg BNN in a recent interview. 

We believe that if Bitcoin fails to spike significantly from the halving, all-in costs per coin, which have risen during the event, could put some crypto miners out of business. They won’t be able to cover their energy costs and still remain profitable. If that occurs, we could see bullish scenarios for bitcoin miners due to a reduction in competition. 

Using power from a hydroelectric dam along the St. Lawrence River in New York, Gryphon Digital Mining is one one of the lowest-cost bitcoin miners in the world, and the cleanest. 

Its digital mining operations are 100% carbon-neutral, and in fact, 100% renewable. Meaning that it doesn’t need any carbon offset credits to get to carbon neutrality. In addition, the company is pursuing a carbon negative strategy.  

All-In Mining Costs

We believe the most savvy of bitcoin miners have spent the past few years trying to make mining less expensive and energy plays a huge role. Following the fourth halving in April this year, many analysts said they expected the event to significantly impact American miners to the point of ‘halving’ their revenues.

We believe that energy efficiency is what will separate those who survive and thrive, post-halving. 

“This acts as a great filter, distinguishing between efficient, profitable miners and those less capable,” Raphael Zagury, chief investment officer at Swan Bitcoin — a Bitcoin-focused financial services company — told Cointelegraph in February. 

Gryphon Digital Mining’s (NASDAQ: GRYP) mission is to create a nimble, energy efficient, environmentally responsible and highly profitable mining outfit. 

Gryphon has some of the lowest costs among the 15 industry leaders, based on Cantor Fitzgerald Research Methodology. 

Post-halving, Gryphon expects to produce a coin for just over an implied forecasted cost of $44,989, compared to Argo Blockchain (ARBK), which produces at the highest end for over $77,500 per coin, and Stronghold Digital Mining (SDIG), which produces for around $66,100 per coin. 

Source: Gryphon Digital Mining investor presentation

The First Carbon-Neutral Bitcoin Miner

In 2023, Gryphon was operating at 98% renewable energy, and by 2024, it was 100% clean and green–a first for bitcoin mining in North America. 

Last year, Gryphon was the first bitcoin miner to receive a Sustainable Bitcoin certification (Green Proofs for Bitcoin, GP4BTC) by Energy Web, an independent non-profit working to develop open-source software for clean energy solutions. 

“Proving to our investors and the market that we have kept and exceeded our promises to remain ESG-focused, with transparent reporting of our carbon emissions, or lack thereof, solidifies our commitments and our leadership in this industry. In the 2023 financial year, 98% of our operations were powered by 100% renewable energy. To go one step further in 2024, we are now 100% renewable,” Chang said in a press release. 

“Gryphon is a pioneer in the realm of zero-emissions bitcoin mining, with a limited carbon footprint thanks to its now exclusive use of renewable energy,” said Adam Hearne, CEO of CarbonChain, which measures Gryphon’s emissions annually. 

In terms of overall efficiency, again Gryphon is among the industry leaders. In six of the last 12 months, it has been either the No. 1 most efficient bitcoin miner, or tied for the No. 1 slot, according to the company’s investor presentation. 

Finally, a Bitcoin Miner That Meets Energy Transition Requirements

Real transparency in the bitcoin mining world is hard to come by, which makes the segment a minefield for investors who need miners to be more efficient and cognizant of all the scrutiny the industry is coming under for threatening the grid with excessive energy usage. 

We believe that Gryphon (NASDAQ: GRYP) has positioned itself ahead of the times, with transparency, accountability and a path to profitability through this this bitcoin miner’s low production costs compared with many of its peers. 

Pressure is mounting–significantly–for crypto mining companies to embrace renewable sources of energy to power their mining operations in a world that is desperately trying to reduce carbon footprints. 

Digital mining is a huge energy consumer due to the massive amounts of electricity required to power all the hardware. 

Scrutiny over crypto-mining energy use is at a high pitch this year, with the Energy Information Administration (EIA) reporting in February that digital mining could represent more than 2% of total annual electricity use in the United States. The EIA estimated that as of January 2022, nearly 40% of all bitcoin mining was being undertaken in the United States, and that these operations were consuming the same amount of electricity as up to 6 million households. 

The Biden administration reportedly reached an agreement with bitcoin miners in late February to collect energy usage data from the industry, which has been a highly sensitive and even litigious issue due to the fact that most bitcoin miners have been enjoying lack of transparency in an industry where rules and regulations are still being developed. 

Gryphon (NASDAQ: GRYP) isn’t among them. Instead, it’s validating the idea that bitcoin can be produced without carbon emissions.

Gryphon’s flagship facility in New York is located near and utilizes power from the Moses-Saunders Power Dam, nestled between the U.S. and Canada on the St. Lawrence River, regulating the level of a river flowing from the Great Lakes to the Atlantic. Hydroelectric power stations offer steady, reliable and cheap energy. 

Source: Ontario Power Generation

Gryphon seeks to be on the right side of history. 

Gryphon’s approximately 9,000 machines are now powered entirely by clean, renewable energy sources. 

Gryphon is partnering with one of the biggest digital data centers in the world and uses 28 MW in an economic opportunity zone. The partnership deal reduces capital investment and financial risk because of the hosting and share structure. 

Survival of the Bitcoin Fittest

Gryphon (NASDAQ: GRYP) is led by CEO, President and Director Rob Chang, a commodities expert who formerly served as CFO of Riot Blockchain as well as managing director and Head of Metals and Mining for Cantor Fitzgerald. 

Chang is joined by another major name in crypto currency as Chair of the Board, Brittany Kaiser, a world-renowned blockchain thought-leader who has not only co-authored over 40 laws in the United States designed to promote and protect blockchain businesses, but also serves on the state of Wyoming's Congressional Standing Committee on Blockchain, Fintech and Digital Innovation. 

Gryphon’s CFO is Sim Salzman, former CFO of Marathon Digital Holdings. Salzman oversaw market cap growth for Marathon from $500 million to over $8 billion in a 12-month period. The company’s chief technical advisor is Chris Ensey, another familiar face formerly of Riot Blockchain, the founder of Dunbar Cybersecurity, and a former Associate Director for IBM. 

ESG funds have been shunning this sector because of the carbon footprint, which we believe might make Gryphon stand out. Large ESG funds have been pushing for some sort of green certification, which very few crypto miners can produce. 

In this survival-of-the-fittest quest, Chang believes that power costs are the key to margins, and finding a low-cost power source is only half the battle. 

Now that it’s a public company, Gryphon believes it can expand further, Chang told Bloomberg BNN in February.

“To date we are the only Bitcoin miner we are aware of that is 100% ESG committed.  While others may claim that they are green right now, it doesn’t preclude them from using carbon emitting power later,” Chang told Bloomberg BNN. 

By Josh Owens

IMPORTANT NOTICE AND DISCLAIMER

PAID ADVERTISEMENT. This communication is a paid advertisement. Oilprice.com and its owners, managers, employees, and assigns (collectively “the Publisher”) is occasionally paid by one or more of the profiled companies or a third party to disseminate these types of communications. In this case, the Publisher has been compensated by Gryphon Digital Mining (NASDAQ: GRYP) to conduct investor awareness advertising and marketing. Gryphon paid the Publisher one hundred twenty thousand dollars and one hundred sixty thousand shares for each of five articles. This compensation should be viewed as a major conflict with our ability to be unbiased. 

Readers should beware that third parties, profiled companies, and/or their affiliates may liquidate shares of the profiled companies at any time, including at or near the time you receive this communication, which has the potential to hurt share prices. Frequently companies profiled in such articles experience a large increase in volume and share price during the course of investor awareness marketing, which often ends as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in volume and share price may likely occur.

This communication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security. Neither this communication nor the Publisher purport to provide a complete analysis of any company or its financial position. The Publisher is not, and does not purport to be, a broker-dealer or registered investment adviser. This communication is not, and should not be construed to be, personalized investment advice directed to or appropriate for any particular investor. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the advertised company’s SEC, SEDAR and/or other government filings. Investing in securities, particularly microcap securities, is speculative and carries a high degree of risk. Past performance does not guarantee future results. This communication is based on information generally available to the public and on an interview conducted with the company’s CEO, and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the Publisher cannot guarantee the accuracy or completeness of the information.

SHARE OWNERSHIP. The owner of Oilprice.com owns shares and/or stock options of the featured company and therefore has an additional incentive to see the featured companies’ stock perform well. The owner of Oilprice.com will not notify the market when it decides to buy more or sell shares of the issuer in the market. The owner of Oilprice.com will be buying and selling shares of the featured company for its own profit and may take this opportunity to liquidate a portion of its position. This is why we stress that you conduct extensive due diligence as well as seek the advice of your financial advisor or a registered broker-dealer before investing in any securities.

FORWARD LOOKING STATEMENTS. This publication contains forward-looking statements, including statements regarding expected continual growth of the featured companies and/or industry. The Publisher notes that statements contained herein that look forward in time, which include everything other than historical information, involve risks and uncertainties that may affect the companies’ actual results of operations. Factors that could cause actual results to differ include, but are not limited to, changing governmental laws and policies impacting the company’s business, the size and growth of the market for the companies’ products and services, the companies’ ability to fund its capital requirements in the near term and long term, pricing pressures, etc. 

INDEMNIFICATION/RELEASE OF LIABILITY. By reading this communication, you acknowledge that you have read and understand this disclaimer, and further that to the greatest extent permitted under law, you release the Publisher, its affiliates, assigns and successors from any and all liability, damages, and injury from this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.

TERMS OF USE. By reading this communication you agree that you have reviewed and fully agree to the Terms of Use found here http:// Oilprice.com/terms-and-conditions If you do not agree to the Terms of Use http:// Oilprice.com/terms-and-conditions, please contact Oilprice.com to discontinue receiving future communications.

INTELLECTUAL PROPERTY. Oilprice.com is the Publisher’s trademark. All other trademarks used in this communication are the property of their respective trademark holders.  The Publisher is not affiliated, connected, or associated with, and is not sponsored, approved, or originated by, the trademark holders unless otherwise stated. No claim is made by the Publisher to any rights in any third-party trademarks.