Bitfarms announced that it will shut down its Bitcoin mining operations over the next two years and transform related facilities into artificial intelligence and high-performance computing data centers, leading to a significant drop in the company's stock price.
The company stated on Thursday that its 18-megawatt Bitcoin mining site in Washington State will be the first to fully transition to support AI and high-performance computing, expected to be completed by December 2026.
Bitfarms CEO Ben Gagnon said, "Although this site accounts for less than 1% of our developable asset portfolio, we believe that transitioning the Washington site to GPU as a service could generate more revenue than our previous net operating income from Bitcoin mining."
He added that this transformation will help the company gradually exit the Bitcoin mining business in 2026 and 2027.
As the field rapidly evolves, Bitfarms' cryptocurrency mining peers are also beginning to adjust some of their operations towards AI. In early November this year, Bitcoin mining company IREN signed a multi-year agreement worth $9.7 billion with Microsoft to provide AI computing resources to the tech giant.
Gagnon told investors during the earnings call that as the difficulty and costs of cryptocurrency mining continue to rise, Bitcoin miners are likely to "continue migrating to lower-cost jurisdictions."
"A key trend currently is that publicly listed mining companies account for nearly one-third of the entire network, and they are all actively transitioning to the high economic efficiency of HPC and AI," he added.
Gagnon noted that Bitcoin mining has begun to see significant growth in regions such as the Middle East, Africa, and Russia, adding, "For most miners in the U.S., the real best opportunity is to transition to the HPC and AI fields."
"Economic factors will drive this process, as the U.S. is the best market for investing in HPC and AI, while Bitcoin mining is essentially location-agnostic," he said. "It can move to lower-cost, higher-risk, and more remote locations, which HPC and AI do not possess."
Gagnon also stated that the opportunities for Bitfarms to relocate its Bitcoin mining operations to other regions are "very limited" and "not worth the management's significant resources or time."
"The best opportunity is essentially to convert the free cash flow from the mining operations that should be estimated today into cash and reinvest it into HPC and AI," he said.
Meanwhile, Bitfarms reported a net loss of $46 million for the third quarter, compared to a loss of $24 million in the same period last year, with a loss of 8 cents per share, worse than analysts' expectations of a 2-cent loss per share.
The company's revenue grew 156% year-over-year to $69 million but still fell short of analysts' expectations by over 16%.
Bitfarms stated that it mined a total of 520 Bitcoins this quarter, with an average direct cost of $48,200 per Bitcoin, and held 1,827 Bitcoins as of Wednesday.
As a result of the performance impact, Bitfarms (BITF) saw its stock price drop nearly 18% on Thursday, closing at $2.60; after-hours trading continued to decline nearly 3.5% to $2.51.
Related: Asset management company Grayscale submitted an IPO application in the U.S.
Original: “Bitfarms Plunges 18% After Plan to Wind Down Bitcoin (BTC) Mining Operations”
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