The Canadian bitcoin miner Hut 8 is leaving its Drumheller, Alberta, location owing to power outages and rising energy expenses.
Hut 8’s Drumheller mining operation, which mines 1.4% of the company’s Bitcoin at a cost of about 11% of its hash rate, is set to close with immediate effect, according to the March 6 release.
“Following a comprehensive analysis, we have determined that the profitability of Drumheller has been impacted significantly by various factors, including elevated energy costs and underlying voltage issues,” Asher Genoot, CEO of Hut 8, said in a statement. Effectively immediately, all of the company’s Bitcoin miners will be relocated to its Medicine Hat, Alberta, Canada facility. “Hut 8 will maintain its lease at the site and the option value of re-energizing the site if market conditions improve,” its staff wrote. Sector stagnation has been caused by a number of issues, including high energy prices, record mining difficulty, and the upcoming 50% reduction in Bitcoin mining incentives due to halving. Alberta, Canada has seen a 1,000% surge in electricity prices per kilowatt hour (kWh) during 2017, according to data provided by Energyrates.ca. Aware of the potential energy use of these new bitcoin mining operations, the provincial administration has also placed restrictions on them.
Hut 8’s income for the first nine months of 2023 dropped by 57% year over year to CA$ 55,184 ($40,757), mostly as a result of the decline in Bitcoin prices during that period. Hut 8 currently makes up 1.3% of the total processing power on the Bitcoin network in terms of hash rate.
Hut 8’s shares dropped more than 23% in a single day on January 19 following claims made by short sellers that the company’s partner, USBTC, was having legal issues with a $725 million merger transaction. As of right now, Hut 8 states that the study “is filled with unfounded character attacks, speculative claims, misrepresented data, and inaccuracies.” Jaime Leverton, the company’s former CEO, left on February 8.