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Josh Owens

Josh Owens

Josh Owens is the Content Director at Oilprice.com. An International Relations and Politics graduate from the University of Edinburgh, Josh specialized in Middle East and…

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How Crypto Miners Must Adapt in 2024

Wall St

Bitcoin underwent its fourth “halving” earlier this month, and while this typically results in a bullish spike in prices, we believe that this year will see a major reckoning in this digital space–and the winners will be those with the lowest all-in costs and the smartest energy setup. 

We believe that the path to profitability is paved by energy sources, with crypto mining now under intense scrutiny for threatening the stability of the grid and, in some cases, causing electricity prices to skyrocket on the excessive demand.  

This is the “death of dirty miners”, Rob Chang, CEO of Gryphon Digital Mining, a maverick in this segment that has gone carbon-neutral and boasts one of the lowest all-in mining costs in the industry, told Bloomberg BNN in a recent interview. 

We believe that if Bitcoin fails to spike significantly from the halving, all-in costs per coin, which have risen during the event, could put some crypto miners out of business. They won’t be able to cover their energy costs and still remain profitable. If that occurs, we could see bullish scenarios for bitcoin miners due to a reduction in competition. 

Using power from a hydroelectric dam along the St. Lawrence River in New York, Gryphon Digital Mining is one one of the lowest-cost bitcoin miners in the world, and the cleanest. 

Its digital mining operations are 100% carbon-neutral, and in fact, 100% renewable. Meaning that it doesn’t need any carbon offset credits to get to carbon neutrality. In addition, the company is pursuing a carbon negative strategy.  

All-In Mining Costs

We believe the most savvy of bitcoin miners have spent the past few years trying to make mining less expensive and energy plays a huge role. Following the fourth halving in April this year, many analysts said they expected the event to significantly impact American miners to the point of ‘halving’ their revenues.

We believe that energy efficiency is what will separate those who survive and thrive, post-halving. 

“This acts as a great filter, distinguishing between efficient, profitable miners and those less capable,” Raphael Zagury, chief investment officer at Swan Bitcoin — a Bitcoin-focused financial services company — told Cointelegraph in February. 

Gryphon Digital Mining’s (NASDAQ: GRYP) mission is to create a nimble, energy efficient, environmentally responsible and highly profitable mining outfit. 

Gryphon has some of the lowest costs among the 15 industry leaders, based on Cantor Fitzgerald Research Methodology

Post-halving, Gryphon expects to produce a coin for just over an implied forecasted cost of $44,989, compared to Argo Blockchain (ARBK), which produces at the highest end for over $77,500 per coin, and Stronghold Digital Mining (SDIG), which produces for around $66,100 per coin. 

Source: Gryphon Digital Mining investor presentation

The First Carbon-Neutral Bitcoin Miner

In 2023, Gryphon was operating at 98% renewable energy, and by 2024, it was 100% clean and green–a first for bitcoin mining in North America. 

Last year, Gryphon was the first bitcoin miner to receive a Sustainable Bitcoin certification (Green Proofs for Bitcoin, GP4BTC) by Energy Web, an independent non-profit working to develop open-source software for clean energy solutions. 

“Proving to our investors and the market that we have kept and exceeded our promises to remain ESG-focused, with transparent reporting of our carbon emissions, or lack thereof, solidifies our commitments and our leadership in this industry. In the 2023 financial year, 98% of our operations were powered by 100% renewable energy. To go one step further in 2024, we are now 100% renewable,” Chang said in a press release

“Gryphon is a pioneer in the realm of zero-emissions bitcoin mining, with a limited carbon footprint thanks to its now exclusive use of renewable energy,” said Adam Hearne, CEO of CarbonChain, which measures Gryphon’s emissions annually. 

In terms of overall efficiency, again Gryphon is among the industry leaders. In six of the last 12 months, it has been either the No. 1 most efficient bitcoin miner, or tied for the No. 1 slot, according to the company’s investor presentation. 

Finally, a Bitcoin Miner That Meets Energy Transition Requirements

Real transparency in the bitcoin mining world is hard to come by, which makes the segment a minefield for investors who need miners to be more efficient and cognizant of all the scrutiny the industry is coming under for threatening the grid with excessive energy usage. 

We believe that Gryphon (NASDAQ: GRYP) has positioned itself ahead of the times, with transparency, accountability and a path to profitability through this this bitcoin miner’s low production costs compared with many of its peers. 

Pressure is mounting–significantly–for crypto mining companies to embrace renewable sources of energy to power their mining operations in a world that is desperately trying to reduce carbon footprints. 

Digital mining is a huge energy consumer due to the massive amounts of electricity required to power all the hardware. 

Scrutiny over crypto-mining energy use is at a high pitch this year, with the Energy Information Administration (EIA) reporting in February that digital mining could represent more than 2% of total annual electricity use in the United States. The EIA estimated that as of January 2022, nearly 40% of all bitcoin mining was being undertaken in the United States, and that these operations were consuming the same amount of electricity as up to 6 million households. 

The Biden administration reportedly reached an agreement with bitcoin miners in late February to collect energy usage data from the industry, which has been a highly sensitive and even litigious issue due to the fact that most bitcoin miners have been enjoying lack of transparency in an industry where rules and regulations are still being developed. 

Gryphon (NASDAQ: GRYP) isn’t among them. Instead, it’s validating the idea that bitcoin can be produced without carbon emissions.

Gryphon’s flagship facility in New York is located near and utilizes power from the Moses-Saunders Power Dam, nestled between the U.S. and Canada on the St. Lawrence River, regulating the level of a river flowing from the Great Lakes to the Atlantic. Hydroelectric power stations offer steady, reliable and cheap energy. 

Source: Ontario Power Generation

Gryphon seeks to be on the right side of history. 

Gryphon’s approximately 9,000 machines are now powered entirely by clean, renewable energy sources. 

Gryphon is partnering with one of the biggest digital data centers in the world and uses 28 MW in an economic opportunity zone. The partnership deal reduces capital investment and financial risk because of the hosting and share structure. 

Survival of the Bitcoin Fittest

Gryphon (NASDAQ: GRYP) is led by CEO, President and Director Rob Chang, a commodities expert who formerly served as CFO of Riot Blockchain as well as managing director and Head of Metals and Mining for Cantor Fitzgerald. 

Chang is joined by another major name in crypto currency as Chair of the Board, Brittany Kaiser, a world-renowned blockchain thought-leader who has not only co-authored over 40 laws in the United States designed to promote and protect blockchain businesses, but also serves on the state of Wyoming's Congressional Standing Committee on Blockchain, Fintech and Digital Innovation. 

Gryphon’s CFO is Sim Salzman, former CFO of Marathon Digital Holdings. Salzman oversaw market cap growth for Marathon from $500 million to over $8 billion in a 12-month period. The company’s chief technical advisor is Chris Ensey, another familiar face formerly of Riot Blockchain, the founder of Dunbar Cybersecurity, and a former Associate Director for IBM. 

ESG funds have been shunning this sector because of the carbon footprint, which we believe might make Gryphon stand out. Large ESG funds have been pushing for some sort of green certification, which very few crypto miners can produce. 

In this survival-of-the-fittest quest, Chang believes that power costs are the key to margins, and finding a low-cost power source is only half the battle. 

Now that it’s a public company, Gryphon believes it can expand further, Chang told Bloomberg BNN in February.

“To date we are the only Bitcoin miner we are aware of that is 100% ESG committed.  While others may claim that they are green right now, it doesn’t preclude them from using carbon emitting power later,” Chang told Bloomberg BNN. 

By Josh Owens


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