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- BitFuFu’s Bitcoin mining costs increased significantly in Q3, impacting production levels and profitability.
- The new Ethiopia facility aims to boost BitFuFu’s capacity, offsetting operational challenges in Bitcoin mining.
BitFuFu Inc., a cloud mining company funded by Bitmain, has encountered severe hurdles in its Bitcoin mining activities, as detailed in its Q3 2024 financial report. The company’s report presents a mixed picture of the present situation of its mining operations by including growing expenses and declining production levels.
Most importantly, the average cost to mine one Bitcoin has surged to $59,452, a significant rise from the $25,618 per BTC reported in Q3 2023.
BitFuFu Faces Declines in Self-Mining and Cloud Mining Output Amid Rising Costs
Furthermore, BitFuFu’s self-mining output slumped by 34% from 515 BTC in the same period last year to just 340 BTC in Q3 2024. Given the significant rise in mining expenses, this decline emphasizes the operating difficulties BitFuFu has faced.
Apart from its internal activities, the company has also observed a notable drop in Bitcoin output for clients of cloud mining. Customers of BitFuFu’s cloud mining services mined just 957 BTC this quarter, a decline from 1,614 BTC in Q3 2023.
This 40% drop highlights a concerning trend for BitFuFu, implying that lately the attractiveness and profitability of cloud mining technologies have suffered.
Rising energy costs, the continuous increase in mining difficulty, and changes in Bitcoin’s market value could have all helped to drive these changes. BitFuFu most certainly has experienced significant operating cost hikes since mining expenses heavily rely on energy prices.
Furthermore, as more people join the Bitcoin network, mining becomes more computationally intensive, which under current market conditions stresses profitability everywhere. As a result, these elements taken together have caused BitFuFu’s operational expenses to rise and production capacity to drop.
BitFuFu has bought an 80-MW Bitcoin mining plant in Ethiopia in order to investigate more reasonably priced options and handle these difficulties.
According to CNF, this plant is supposed to be very important in reducing the running expenses of the business and increasing its mining capacity. BitFuFu’s worldwide mining infrastructure will be strengthened with this purchase to surpass 600 MW of capacity for hosting.
