Canadian Bitcoin miner Hut 8 is facing an increasingly hostile environment that has forced it to make a radical decision: the immediate closure of its Drumheller mining site in Alberta. This announcement comes at a time when soaring energy costs and power supply problems are undermining the profitability of the mining sector..
Exploding electricity rates suffocate BTC miners in Drumheller
Bitcoin miners are facing an increasingly difficult environment, with growing operational and energy challenges. Hut 8, a major figure in the mining sector, has not been spared this turbulence and saw itself forced to close one of its main production sites in Drumheller, due to prohibitive energy costs and frequent power cuts.
Soaring electricity rates in Alberta have weighed heavily on the profitability of energy-intensive farms such as Drumheller. According to Energyrates.ca, the prices have soared by a stratospheric 1000% since 2017 in the province.
The CEO Asher Genoot lamented that this situation, coupled with recurring power problems, has “significantly impacted” the profitability of the site, which was responsible for 1.4% of the total Bitcoin production of Hut 8.
After a thorough analysis, we determined that Drumheller’s profitability was significantly affected by a variety of factors, including high energy costs and underlying voltage problems.
Déclaration de Asher Genoot, PDG de Hut 8
Faced with this unfavorable context, the company had no choice but to announce the temporary closure of the Drumheller facility, transferring its mining equipment to the Medicine Hat site in order to preserve its operational capacities. If this decision represents a temporary renunciation of 11% of its hashrate power, Hut 8 will still be able to relaunch the site as soon as the tide turns.
This restructuring comes after a particularly trying 2023 financial year, marked by a 57% plunge in revenues over the first 9 months. This is a heavy toll that miners have had to pay in an environment of unprecedented mining difficulty, to which will soon be added the impact of Bitcoin’s halving, which will halve mining rewards.
In the Bitcoin mining ecosystem, Hut 8 currently occupies a significant market share, representing 1.3% of the total hash capacity of the Bitcoin network.
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.
