Canada-based Bitcoin mining firm Iris Energy has announced a significant expansion to its computer fleet, increasing its total hashrate by 25% from 5.6 exahashes per second (EH/s) to 7.0 EH/s. The company added 7,000 of Bitmain’s newest S21 miners to its fleet at a cost of $19.6 million. This expansion is in preparation for the highly anticipated “halving” event, which is only six months away.
“The purchase is expected to be funded from existing capital sources, including cash in the bank (~$64 million, no debt), operating cash flow, and other recently disclosed funding programs,” said the company in a press release.
Hashrate refers to the number of hashes, or guesses, that miners can generate to solve a complex mathematical problem required to create Bitcoin’s next block. An exahash is equivalent to one quintillion hashes. The faster miners can produce hashes, the more Bitcoin they earn, increasing their revenue. By increasing their hashrate, Iris Energy aims to increase its chances of winning the race to create blocks on the network.
Shares of Iris Energy, which trade on the NASDAQ under the IREN ticker, jumped 9.5% following the announcement. The company had previously revealed plans to expand its capacity to 9.1 EH/s by early 2024, but that target has now been raised to 9.4 EH/s. Iris Energy is also actively monitoring the market for additional hardware acquisition opportunities.
The upcoming halving event in April 2024 will reduce miners’ guaranteed Bitcoin rewards per block from 6.25 BTC to 3.125 BTC. This may make mining less sustainable for some firms, leading to a more competitive industry where only the most cost-efficient companies can thrive. However, many view the halving as a catalyst for Bitcoin bull markets, which could make the industry more profitable in dollar-denominated terms.
Other major mining firms, including Blockstream, Riot, and CleanSpark, have also announced expansion plans in anticipation of the Bitcoin halving. These companies are taking advantage of current market conditions to prepare for the event. CleanSpark CFO Gary A. Vecchiarelli stated, “We continue to make use of opportunities created by current market conditions to prepare for next year’s Bitcoin halving,” upon announcing a $9.3 million expansion in June.
Overall, the expansion of Iris Energy’s computer fleet demonstrates the growing importance of increasing hashrate in preparation for the upcoming Bitcoin halving. With mining becoming more competitive, companies are investing in hardware to maintain their profitability and position themselves for success in the evolving cryptocurrency industry.