Will Trump keep cheap electricity promises to BTC miners?

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BTC block reward miners are hoping Donald Trump’s second presidential term will offer a smoother path to profitability, thanks to cheaper electricity, loosened environmental rules and blind patriotism.

The share prices of publicly listed BTC mining operators soared on Wednesday following Trump’s electoral victory over opponent Kamala Harris the night before. Some prominent miners saw their shares jump 20-30% in a single day, boosted by the perception that Trump will lift the constraints that have kept their operations in the red.

In June, top execs from those same mining companies met with Trump at his Mar-a-Lago estate in Florida for a 90-minute chat. Trump had likely never heard of block reward mining before that meeting but was reportedly very intrigued by the execs’ claims that if America didn’t let miners do as they pleased, the business of securing BTC network transactions would be left to those godless Chinese communists.

The miners’ pitch also included their participation in the ‘crypto’ sector’s pledge to raise over $100 million and turn out five million voters for Trump’s election campaign. The pitch appeared to work, as mere hours after that meeting, Trump posted on his Truth Social platform about wanting “all the remaining [BTC] to be MADE IN THE USA!!!”

One month later, at a private fundraiser on the fringes of the BTC Nashville conference, mining execs from Riot Platforms, Marathon, CleanSpark and others reportedly paid $500,000 apiece to bend Trump’s ear. The next day, Trump publicly declared his support for miners, acknowledging their insatiable electricity demands by referencing America’s abundant oil supplies and pledging that “with low energy costs, America will become the world’s undisputed [BTC] mining powerhouse.”

Trump cross-referenced miners’ electricity demands with those of AI data centers—which many miners have begun ‘pivoting’ toward because it’s more profitable than minting new BTC. Trump promised that “we’ll be having power plants built at the sites. We’ll be releasing people from certain ridiculous requirements, and we’ll be using fossil fuel to make electricity because we’re going to have to. We’ll be using nuclear.”

But now that he’s in office—and is constitutionally barred from seeking a third term in 2028—will Trump follow through on his mining pledges? Trump is notoriously transactional in his relationships and has a well-documented history of not honoring his debts to contractors once they’ve done the work they were hired to do.

Trump himself told the Nashville audience that, after being told how many people were involved in crypto, his campaign team told him, “let’s be nice to them, at least until after the election.” Any miners expecting a payoff here should probably give generously to Trump’s inaugural committee/slush fund, just to be sure.

Tricks or treats

There’s no question that the mining economy currently involves pushing rocks uphill (financially speaking). This week, BTC mining difficulty jumped over 6%, pushing it over the 100 trillion mark for the first time. The seven-day moving average also hit a new record of 755.5 EH/s last week and shows no sign of letting up.

The unprecedented difficulty adjustments will put further pressure on smaller mining operators and/or those whose fleets are equipped with less modern (and thus less capable) rigs. The consolidation wave that has swept over this sector in the past couple of years will only increase as this Darwinian struggle weeds out the weaklings.

In the meantime, here are the October performances by some of the most prominent publicly-traded BTC miners, in descending order of magnitude in BTC production:

• MARA (NASDAQ: MARA), formerly Marathon Digital, mined 717 BTC in October, only 2% higher than September’s total despite a much larger 14% increase in its energized hash rate. MARA won 3% fewer blocks in October than they did in September, which the company blamed on the increased mining difficulty, but it was still their best month since April’s halving event. MARA is one of the growing number of miners who’ve adopted a HODL strategy, refusing to sell the BTC they mine and borrowing hundreds of millions of dollars to buy more BTC on the open market. As of October 31, MARA held 27,562 BTC.
• CleanSpark (NASDAQ: CLSK) mined 655 BTC in October, up nearly one-third from September. CleanSpark sold a mere 2.78 BTC last month, leaving it with 8,701 tokens on its balance sheet. On October 30, CleanSpark completed its $155 million acquisition of Tennessee-based GRIID Infrastructure Inc. and the company hopes this will boost its mining capacity in the state to over 400MW.
• Riot Platforms (NASDAQ: RIOT) produced 505 BTC in October, 23% higher than September’s total, despite hash rate rising only 5%. Riot held 10,928 BTC as of October 31. Riot’s Q3 financial report showed the company losing $154.4 million in the three months ending September 30, as the cost of mining a single BTC (including hardware depreciation) hit $83,358 while the average value of producing a single BTC during Q3 was only $61,133. (With those kind of negative returns, you can see why so few miners reveal the full cost of mining to their investors.)
• Iris Energy (NASDAQ: IREN) produced 439 BTC in October, 92 more than it mined in September as its hash rate improved by one-fifth. Mining revenue totaled $28.2 million compared to just $1 million for Iris’s AI Cloud Services operations, but the company is building out that portion of its business with an additional 1,080 Nvidia GPUs, more than doubling its current 816 rigs.
• Core Scientific (NASDAQ: CORZ) mined 345 BTC in October, 24 more than in September, even as its hash rate suffered a slight decline. No HODl’ing here, as Core sold 370 BTC in October, the same number as in September. Core needs all the cash they can get now, as its Q3 report showed a net loss of $455.3 million. While much of that was due to non-cash adjustments, Core’s operating loss was still an unpleasant $41.2 million as revenue was down 15.5% year-on-year.
• Bitfarms (NASDAQ: BITF) collected 236 BTC in October, 19 more than September, despite little change in hash rate. BitFarms sold 194 BTC last month, 21 more than September, treating its production as if it’s running the Olympia Restaurant (“Let’s go, let’s go, we gotta have turnover, turnover!”). While Bitfarms has 1,188 BTC in its ‘treasury’ it also features a ‘Synthetic HODL’ of 802 “long-dated BTC call options.” (Excuse us while we go Synthetic Hurl.)
• Bitmain spinoff Bitdeer (NASDAQ: BTDR) produced 174 BTC in October, 10 more than September. Unlike most miners, Bitdeer builds its rigs in-house, and mass production of its new SEALMINER A1 and A2 machines got underway last month.
• Cipher Mining (NASDAQ: CIFR) generated 168 BTC in October, up from 155 in September. But Cipher sold another 248 BTC last month, leaving it with 1,428 tokens on its balance sheet. Cipher’s Q3 financial update showed a net loss of $87 million, a much worse result than Q2’s $15 million loss, as revenue fell by half to just $24 million.
• TeraWulf (NASDAQ: WULF) mined 150 BTC in October, down from 176 in September, as its hash rate fell 17% month-to-month. However, help is on the way as the installation of new mining rigs is ongoing, with a corresponding increase in hash rate expected by some unspecified date.
• Hut 8 (NASDAQ: HUT) produced 100 BTC in October, up from 85 in September, despite its hash rate remaining static. But its balance sheet shows 9,110 BTC, only four more than the previous month. The sale proceeds likely fueled this week’s purchase of 31,145 Bitmain Antminer S21+ rigs, delivery of which will come early in the new year.
• Bit Digital (NASDAQ: BTBT) mined 52 BTC in October, basically flat from September. The company’s ‘treasury’ features 781 BTC and (surprise!) 27,503 ETH, with most of the latter staked in native staking protocols.

Ixnay on the yingspay

It remains to be seen what impact (if any) Trump’s return to the White House might have on a new U.S. Treasury/Defense Department final rule on “certain real estate transactions by foreign persons near more than 60 military bases and installations across 30 states.”

The rule follows the federal government shutting down a mining operation near the Warren Air Force Base near Cheyenne, Wyoming earlier this year due to national security concerns. That operation was run by Chinese-owned MineOne and, given recent incidents of Chinese espionage on U.S. soil, it was thought that the miners’ location a mere mile away from a nuclear missile base was more than a little iffy.

While most U.S. mining sites are run by U.S. operators, Bitdeer calls Singapore home. Bitdeer has sites in three U.S. states, but none are within the new rule’s exclusion zones. However, the new rules will limit Bitdeer’s freedom to plunk a new installation anywhere near any site the U.S. military deems sensitive.

However, since most U.S. operators employ mining gear manufactured outside America, the language in that MineOne shutdown order could prove problematic. The Committee on Foreign Investment in the United States (CFIUS) said it had “assessed the risk associated with the presence of specialized equipment on the property used to conduct cryptocurrency mining operations, some of which is foreign-sourced and presents significant national security concerns.”

Is it getting warm in here?

Trump may be prepared to start burning fossil fuels o’plenty to help his U.S. mining contributors, and he also mentioned nuclear power as another option for cheap and plentiful power. Trump’s view of green energy, like windmills, is almost comically antagonistic, apparently inspired by the installations near his Scottish golf club. 

Exponential Science, a non-profit tech research firm, believes that jurisdictions banning mining operations within their borders over environmental concerns may be doing more harm than good for the environment. Their new report, titled The Unintended Carbon Consequences of Bitcoin Mining Bans: A Paradox in Environmental Policy, argues that mining bans force operators to set up shop in “regions with higher carbon intensities.”

The paper basically argues that if mining is going to happen, better it happen in jurisdictions with stricter environmental regulations and abundant supplies of renewable (cleaner) energy. This argument ignores the fact that this energy expenditure is utterly unnecessary regardless of where it occurs or on what power sources it relies on.

BTC, which deviated from Satoshi Nakamoto’s original Bitcoin design nearly a decade ago, no longer offers any promise of utility, existing simply as an instrument for financial speculation. As a result, all the planet-heating energy expended in securing the BTC network is for the benefit of the few at the expense of the many.

Far better for an energy-intensive proof-of-work (PoW) consensus mechanism be reserved for securing a blockchain that promises so much more than enriching a handful of HODL’ers. The same PoW consensus mechanism supporting a network that can process millions of transactions—and many more types of transactions—at the same environmental cost is the only bargain that makes sense in a rapidly warming world.

Watch: CoinGeek Weekly Livestream w/ Kurt Wuckert Jr. – Untangling Bitcoin Mining