Galaxy Digital Holdings CEO Mike Novogratz has called the Helios mining deal a “transformational acquisition” for the companyas it works to increase its exposure to the bitcoin mining sector.
The acquisition $65M From Argo Blockchain’s Flagship Mining Facility By Cryptocurrency Investment Firm was announced on December 28 as part of Argo’s clampdown to avoid bankruptcy.
Tweeting about the deal on December 29, Novogratz emphasized that Galaxy is a “firm believer” in the long-term future of bitcoin (BTC) and that the company will continue to ramp up its mining initiatives.:
“Bear markets are for building. We’re long-term believers in BTC and expect the lowest-cost miners to win over time. Helios is a transformative acquisition that will expand our mining capabilities and services as we continue to build for the decentralized future.”
Since we started mining bitcoin in Q1 2021, we outsourced our miners to hosting providers. But we always had the idea that we would vertically integrate our mining capabilities.
—Mike Novogratz (@novogratz) December 28, 2022
“Bear markets are for building. We strongly believe in BTC for the long term and expect lower cost miners to win over time. Helios is a transformative acquisition that will expand our mining capabilities and services as we continue to build towards a decentralized future .”
Since we started mining bitcoin in Q1 2021, we outsource our miners to hosting providers. But we always had the idea that we would vertically integrate our mining capabilities.
Explaining the deal in more detail, Galaxy CEO outlined that the firm has a specific “thesis” on how to approach the mining sector: “low cost electricity, very efficient equipment” and “buy cheap ASIC miners”.
“That is the recipe for success in mining, even when the hash rate increases,” he stated..
Recent data from the Hashrate Index found that bitcoin ASIC miner prices are hovering around lows not seen since at least 2021; the prices of the most efficient ASIC miners have fallen 86.8% since their peak in May 2021.
Galaxy has five lines of business: trading, asset management, cryptocurrency mining, venture investing, and investment banking.. According to its website, it currently has $1.9 billion worth of assets under management.
Currently, Galaxy primarily uses hosting services for its mining operations. However, Novogratz points out that The Helios property, with a capacity of 200 megawatts (MW), will not only allow the company to operate mining machines on its own site, but also to host other.
Helios potentially has a lot of scalability to become one of the biggest miners on the market. Argo Blockchain previously outlined in May this year that it had plans to increase electrical capacity to 800MW in “the next few years.”
At the time, the firm also said that it expected Helios to reach a BTC mining capacity of 5.5 exahashes per second by the end of the year.with the potential to eventually reach 20 EH/s.
Looks like the Galaxy has some cash to burn amid the 2022 bear marketnoting that it also gave Argo Blockchain a $35 million equipment financing loan in conjunction with the acquisition.
The move also builds on another move from earlier this month, when Galaxy acquired cryptocurrency self-custody platform GK8 for an undisclosed amount.
GK8 was being auctioned off as part of Celsius’ bankruptcy proceedingsafter the defunct cryptocurrency lender took over the company for $115 million in 2021.
Novogratz called the acquisition a “crucial cornerstone in our effort to create a true full-service financial platform for digital assets.”.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.