Alameda’s overlooked bitcoin mining bet
$1.15B investment into Genesis Digital Asset
Earlier last month, amid the FTX bankruptcy chaos, Bloomberg reported that FTX’s trading sister Alameda had invested $1.15 billion in equity into Genesis Digital Asset (GDA), a bitcoin prop mining operation.
The Wall Street Journal did a follow-up this week and one of the key takeaways was that more than half of the investment was used to buy existing shares of two co-founders of GDA while the remaining amount was to fund GDA’s mining operations.
A lot of the operational data about GDA remains unknown given its a private entity. But here’s a quick overview of its operation footprint based on everything that’s been publicly revealed.
The only monthly production GDA ever disclosed was mining 662 BTC in Sep'21, which would dwarf its publicly listed peers at the time. For instance, Riot mined 406 BTC that month and Core Scientific mined 1,588 BTC in Q3’21.
As of Oct '21, GDA said it was operating a capacity of 170 MW at 3.8EH/s. Its plan at the time was to run 1.4 GW in total capacity by 2023. To materialize that plan, GDA made a series of moves including equipment purchases and announcing new power capacities in the U.S. and Europe. Below is a recap of its announcements.
However, most of the announcements were merely plans and it needs to be clarified to what extent GDA has achieved the goal so far. The most recent press release was made in Oct '22 when it said it officially broke ground on a new 40 MW data center in Glasscock county Texas. In the Aug '22 statement announcing the 704 MW capacity it secured in 2022, GDA provided a breakdown of locations in Texas, South, and North Carolina. One of the projects in Texas was in Glasscock county.
It’d be interesting to see whether the creditors of FTX and Alameda could get a slice of the bitcoin rewards that GDA is producing as part of the bankruptcy proceedings.
Regulation news
Hydro-Quebec CEO Sophie Brochu to leave as province boosts energy development - Bloomberg
City commission denies approval of West Rome crypto mining request in split vote - Northwest Georgia News
Financial news
Alkimiya Raises $7.2M Funding Round to Grow Cash Flow Hedging Protocol for Miners, Stakers - CoinDesk
Bitfarms Looks to Amend BlockFi Loan, Warns of Default - CoinDesk
Bitcoin Miners Deleverage, Scale Back as Crypto Winter Continues into 2023 - Bloomberg
Jefferies Downgrades Marathon Digital on Construction Delays - CoinDesk
Corporate news
Celsius sells bitcoin mining machines for $1.3 million - The Block
Argo Blockchain's Bitcoin Mining Margin Widens Most In at Least a Year - CoinDesk
Hive Earned 184 BTC From Curtailing Its Power Use in December — That's Almost As Much As it Mined - CoinDesk
Feature
SBF’s Supersized Bet: $1 Billion for a Bitcoin Miner on the Kazakh Steppe - WSJ
Crypto Lenders Morph Into Miners as Repossessed Rigs Pile Up - Bloomberg
Bitcoin mining was booming in Kazakhstan. Then it was gone - MIT Technology Review
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Excellent content as always. Hope to see your subs increase to the level they deserve.
On MARA, glad to see they're selling newly mined BTC, in accordance with their announcement of such last earnings call. It's the smart move. FCF will be king as we move through the painful run-up to the 2024 halving.