For the past few weeks, we have been witnessing an exodus of Chinese miners. Long before China decided to expel its Bitcoin (BTC) miners, they were already leaving in droves, and new data from Cambridge University shows that they are likely heading to the United States. Prior to the start of China’s mining ban, the country accounted for 46 percent of the world’s hashrate, which was already a 75 percent decrease in market share from September 2019.
US miners big winners from China Ban
5 provinces, including Inner Mongolia, Xinjiang, Qinghai, Yunnan and Sichuan, have either purely banned bitcoin mining or strictly regulated it. And now, for the first time since the advent of ASICs in 2013, the bitcoin mining industry is looking for a new home.
Marathon, the future number one BTC miner in the world?
Marathon Patent Group is the number 1 BTC miner in the United States. During October 2020, the company ordered 10,000 Antminer S19s from Bitmain. In February 2021, Marathon then added a few thousand ASICs to its arsenal. In addition, the latter has signaled its intention to produce bitcoins that meet Office of Foreign Asset Control (OFAC) anti-money laundering requirements.
In its first attempt to produce a block with only “clean” bitcoins, however, Marathon ran afoul of the crypto community. Indeed, participants in the bitcoin network voluntarily polluted Marathon’s compiling OFAC block, sending transactions related to black markets.
Finally, Marathon Patent Group also wants to achieve carbon neutrality for its Texas site. The new 300-megawatt mining farm is expected to house 73,000 ASICs. The site will be operational in the first quarter of 2022 with a hashrate of 10.4 EH/s with 70% carbon neutrality. Eventually, the goal is to achieve 100% carbon neutrality. However, Marathon has not communicated how it will measure carbon neutrality.
Riot Blockchain quadruples its bitcoin production year over year
Between December and August 2020, Riot Blockchain, too, ordered several thousand ASICS Antminer from Bitmain. However, the semiconductor shortage slowed down deliveries, which were spread out throughout 2021.
In April 2021, Riot completed 2 major operations aimed at strengthening its mining capabilities. Firstly, the BTC miner entered into a second agreement with Bitmain that involves the delivery of 42,000 Antminer S19s for a cool $138 million. Deliveries of these thousands of ASICs are scheduled to begin in November 2021 and run through 2021-2022.
At the same time, the company acquired a new data center located in Whinstone, Texas. This transaction was internally financed on a blended basis. Miner paid $80 million in cash and sold 12 percent of its stock to the former data center operator. Once operational, the farm will be the largest bitcoin mining facility in the United States.
According to Riot’s data, its hash power grew 460 percent in 2020, and the growth continues in 2021. In fact, in March 2021, the company reported an 80 percent increase in output compared to March 2020. Then, in June 2021, Riot reportedly mined 243 BTC, a 406% increase in production from June 2021.
Canadian bitcoin miners are also pulling their weight, thanks to renewable energy
U.S.-based companies aren’t the only major players in the North American bitcoin mining space. Hive Blockchain and Hut 8, 2 Canadian miners, are also well positioned to take advantage of the fall of Chinese miners.
Hut 8, the Canadian miner stingy with BTC
Until 2018, Hut 8 was the largest North American miner in terms of hashrate. However, the collapse of prices and changes in legislation have greatly impacted the company. Indeed, Hut 8 was forced to sell its Norwegian site due to regulatory reasons in 2018. This combination of negative factors led the company to report losses of $136 million in 2019.
Nonetheless, Hut 8 has corrected its course in 2021. The company successfully listed on the NASDAQ in June. Hut 8 was already listed on the Toronto Stock Exchange, but this new listing allowed it to raise more funds, in order to maintain its war chest. Indeed, Hut 8 has a rather particular policy. The company seeks to retain the majority of the BTC it mines. To date, Hut 8 is the company holding the most self-mined bitcoins with a goal of 5,000 BTC on those wallets by 2022.
Hive Blockchain, leader in eco-friendly mining
Finally, the last major player in North America is Hive Blockchain, specialized in green mining. The company operates mostly sites powered by green energy. From Canada to Sweden to Iceland, it uses all forms of green energy for its operations. In May, Hive was also forced to divest its Norwegian site. However, the company made up for this decrease in hashrate, purchasing 3,000 M30S ASICs for one of its Canadian sites.
North America’s growing dominance is a simple mix of chance and preparation. Before bitcoin miners started coming to the U.S., companies in the country made a bet that one day, if the proper infrastructure was in place, miners would move to the U.S., which seems to be paying off. The country’s economic, legal and geopolitical stability make it a prime location for this sector.