As the blockchain industry navigates a troubled cryptocurrency market, acquisition opportunities have arisen across different asset types. The bitcoin mining industry is no exception.

Bitcoin miners play a key role as validators of transactions in lieu of a traditional intermediary bank. Specialized computer equipment (mining equipment) solves a complex math problem created by the bitcoin software, which validates a block of bitcoin transactions recorded on the digital ledger. The miner that solves the problem is awarded with bitcoin.

Bitcoin prices reached $65,000 in November 2021, and just a year later the price is below $20,000. The combination of this precipitous price decline, higher energy prices, and use of debt to finance mining equipment purchases have battered the mining industry. As a result, mining equipment and operations are available for purchase as distressed companies scramble for cash.

As always, the devil is in the details when looking at asset acquisitions during a downturn. This is especially the case in the crypto mining industry where companies rushed to purchase mining equipment and quickly establish facilities to take advantage of market conditions.

Mining equipment has been selling for 50% to 75%, and at even larger discounts to prices one year ago. What are the practical considerations as more mining equipment and facilities become available on the marketplace?

Hash Rate Warranty

Crypto mining is all about the computational power of the mining…