Bitcoin Miner Riot Acquires Small Kentucky Competitor for $92 Million Amid Industry Downturn
Riot Platforms announced on Tuesday its acquisition of Block Mining, a Kentucky-based company, for $92.5 million. The deal involved $18.5 million in cash and $74 million in Riot common stock, with potential additional payments tied to performance milestones. This move comes as smaller Bitcoin miners face challenges due to headwinds in the sector.
The acquisition has increased Riot’s operational capacity by 60 megawatts, with plans to reach 110 MW by the end of the year and over 300 MW in the future. By expanding its capacity, Riot aims to enhance its total hash rate, which measures the computing power dedicated to mining Bitcoin. A higher hash rate allows Riot to solve complex mathematical problems faster and secure more Bitcoin rewards.
Following Bitcoin’s halving in April, which reduced block rewards, the cost of mining a single coin doubled. This cost increase has put pressure on less efficient miners, leading to operational losses due to rising energy costs and reduced profitability margins. Smaller miners with higher operating costs are particularly vulnerable, while larger firms with access to cheaper electricity and more efficient equipment have fared better.
Riot’s acquisition of Block Mining aims to leverage the latter’s infrastructure and management team to drive expansion and improve efficiency. The acquisition has immediately boosted Riot’s hash rate by 1 exahash per second, with potential growth to 16 EH/s by the end of 2025. This move has also diversified Riot’s geographical footprint, providing a hedge against shifting energy costs in specific regions.
Riot currently operates Bitcoin mining facilities in central Texas and Kentucky. The company’s strategic acquisition of Block Mining underscores its commitment to growth and efficiency in the evolving crypto mining landscape.
