Bitfarms Drives Towards Aggressive 2024 Growth Powered by Paraguay Hydro

Lily Polanco Follow Mar 08, 2024 · 3 mins read
Bitfarms Drives Towards Aggressive 2024 Growth Powered by Paraguay Hydro
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Bitfarms Ltd., a global vertically integrated Bitcoin mining company, recently reported strong Q4 2023 results that demonstrate its positioning for major expansion in 2024 powered by low-cost hydroelectric energy in Paraguay.

In the fourth quarter, Bitfarms earned 1,236 Bitcoin, a 5% increase from Q3, aided by 30% higher average Bitcoin prices. This brought their full year 2023 Bitcoin production to 4,928, despite the Bitcoin network’s difficulty rising around 74% compared to 2022. Bitfarms was able to boost Q4 gross mining margin to 52%, up from 38% in Q3, through operational improvements.

A key driver of Bitfarms’ growing profitability has been its focus on securing low-cost, sustainable energy sources like hydropower. By Q4, the company had 186 MW (78%) of its 240 MW operating capacity powered by renewable hydro sources. Much of this hydro capacity is located in Paraguay, where Bitfarms is rapidly scaling up operations.

Paraguayan Hydro Expansion On Track

At their Paso Pe facility in Paraguay, Bitfarms recently amended their energy contract to increase operating capacity from 30 MW to 70 MW for the air-cooled warehouse portion. They expect to begin energizing and installing new Bitmain T21 and hydro miners at the expanded 50 MW air-cooled section in March 2024.

Bitfarms is also making quick progress on a major new 100 MW hydro-powered mining facility in Yguazu, Paraguay. In January 2024, they purchased land for this project, and in February signed the engineering, procurement and construction contract for the electrical substation and transmission lines.

By the end of Q2 2024, Bitfarms targets reaching 12 EH/s of hashrate capacity and 25 w/TH efficiency through deploying 35,888 new Bitmain T21 miners. They aim to triple total hashrate to 21 EH/s by year-end while boosting overall operating capacity 63% to 391 MW and improving fleet efficiency 34% to 23 w/TH.

Paraguay is clearly central to these aggressive expansion plans due to its ample supply of low-cost hydroelectric power from the Itaipu dam, one of the largest renewable energy sources in the world.

Enhancing Financial Flexibility

To support this major infrastructure buildout, Bitfarms has been rapidly improving its financial position and liquidity. They recently eliminated all debt except for lease obligations, paying off the last $4 million in Q1 2024 after reducing debt from $165 million in June 2022.

Additionally, Bitfarms raised $41 million from a private placement in November 2023 and secured another $17 million from the exercise of associated warrants. This left them with $118 million in total liquidity at year-end to fund growth initiatives.

The company has also employed a “Synthetic HODL” strategy, holding 135 long-dated Bitcoin call options at year-end to maintain upside exposure while selling portions of mined Bitcoin to fund operations and expansion.

Looking Ahead

With a strong financial foundation now in place, Bitfarms is laser-focused on ramping up its low-cost hydro-powered mining infrastructure, particularly at their Paraguayan sites in Paso Pe and the new Yguazu facility.

Leveraging Paraguay’s abundant hydroelectric resources certainly appears to be a key part of Bitfarms’ strategy to drive significant hashrate and efficiency gains in 2024 while maintaining a relatively low cost of production around $15,200 per Bitcoin.

The company’s success in realizing its aggressive 2024 targets will depend heavily on its ability to continue tapping into sustainable, low-cost power sources like Paraguay’s hydro resources to fuel its rapidly expanding Bitcoin mining operations.

Written by Lily Polanco Follow
Junior News Writer @