Hut 8 Closes Alberta Bitcoin Mining Site Ahead of Halving
U.S.-listed bitcoin mining and hashrate management firm Hut 8 (NASDAQ: HUT) is closing one of its sites in Alberta, Canada ahead of the halving event due to rising energy costs and site issues.
The company said on Wednesday that it has ceased the operation of its Drumheller site in Alberta. Hut 8 plans to relocate 130 PH/s of its more efficient miners to its other Alberta site in Medicine Hat while retiring the remaining older equipment with about 800 PH/s of hashrate.
Miners that are less efficient than 38 J/TH will be retired from operations, the company said. However, it will maintain the lease of the Drumbeller site which allows it to re-energize miners if “market conditions improve.”
The company said that after the restructuring, its proprietary mining hashrate will be reduced from 7.24 EH/s as of the end of February to 6.45 EH/s.
Hut 8 is among a list of public mining companies that have been retiring old and inefficient hashrate in anticipation of the halving event that is set to take place around April 20.
“Following a comprehensive analysis, we have determined that the profitability of Drumheller has been impacted significantly by various factors, including elevated energy costs and underlying voltage issues,” Hut 8’s new CEO Asher Genoot said in the statement. The Drumheller site had electrical issues in May 2023.
Based on its latest earnings report in Q3, Hut 8’s fleet hashcost was on the higher end compared to its public peers with $47/PH/s. That means if bitcoin’s hashprice falls under $100/PH/s before the halving, Hut 8’s fleet will not be able to make gross profits immediately after the halving.
As previously reported, HIVE and Argo have both announced plans to either retire or replace older miners with the latest generation of equipment.
