Cipher Mining Announces January 2024 Operational Update

Rhea-AI Summary

Cipher Mining Inc. (NASDAQ:CIFR) released its unaudited production and operations update for January 2024, highlighting key metrics such as BTC mined, power sales equivalent BTC, BTC sold, BTC held, deployed mining rigs, and month-end operating hash rate. The company's CEO, Tyler Page, commented on the challenging market conditions for bitcoin miners in January, with spikes in network hash rate and lower transaction fees. Despite this, Cipher continued to generate positive cashflow and added to its bitcoin inventory, ending the month with approximately 1,132 BTC. The company also received the first shipment of new Bitmain S21 mining rigs and is preparing them for deployment.

Insights

Market Research Analyst

The production update from Cipher Mining Inc. provides valuable insights into the company's operational status and its ability to navigate the volatile cryptocurrency market. The reported 20.4% decrease in BTC production is a significant metric that investors should consider, as it could reflect both the increasing difficulty of mining Bitcoin and potential operational challenges. Moreover, the increase in the network hash rate suggests heightened competition among miners, which could further pressure Cipher's margins.

Another key point is the company's strategic decision to sell approximately 34 BTC. This action indicates active treasury management, aiming to balance holding an asset that can appreciate in value with the need for liquid capital to fund operations or take advantage of market opportunities. The fact that Cipher ended the month with a substantial bitcoin inventory of approximately 1,132 BTC shows confidence in their long-term strategy and the potential upside they see in holding Bitcoin.

Financial Analyst

From a financial perspective, Cipher Mining's update suggests resilience in maintaining positive cash flow despite adverse market conditions, which is commendable for investor confidence. The deployment of 70,000 mining rigs and an operating hash rate of 7.2 EH/s positions the company to potentially capitalize on future improvements in the Bitcoin market. However, the elevated power prices in Texas and the need for curtailment highlight the operational risks associated with geographical concentration and dependence on external factors like weather and energy costs.

Investors should assess the impact of these operational updates on Cipher's cost structure and profitability. The addition of the new Bitmain S21 mining rigs could improve the company's efficiency and output, potentially offsetting some of the recent production declines. Yet, the capital expenditure for these rigs and their impact on the company's balance sheet and future cash flows must be scrutinized.

Cryptocurrency Expert

The operational update from Cipher Mining Inc. is a reflection of the inherent challenges in the cryptocurrency mining industry. The mention of challenging market conditions and the adaptation to network dynamics is critical for stakeholders to understand the company's agility in a sector known for its rapid changes. The introduction of the Bitmain S21 mining rigs is a noteworthy development, as it signals the company's commitment to staying at the forefront of mining technology, which is crucial for maintaining competitiveness in terms of hash rate and energy efficiency.

For those unfamiliar with the industry, hash rate refers to the total computational power used to mine and process transactions on a blockchain. A higher hash rate means more competition for mining new blocks, which can lead to increased difficulty and potentially lower profitability for individual miners. Cipher's ability to maintain a substantial operating hash rate amidst these conditions is a testament to its technical capabilities and strategic planning.

NEW YORK, Feb. 01, 2024 (GLOBE NEWSWIRE) --  Cipher Mining Inc. (NASDAQ:CIFR) (“Cipher” or the “Company”) today released its unaudited production and operations update for January 2024.

Key Highlights

Key Metrics	January 2024*
BTC Mined	371
Power Sales Equivalent BTC1	8
BTC Sold	34
BTC Held	1,132
Deployed Mining Rigs	70,000
Month End Operating Hash Rate (EH/s)	7.2

*Approximate values

Management Commentary for January
“January featured more challenging market conditions for bitcoin miners compared to previous months, with spikes in overall network hash rate and lower transaction fees. Also, the colder weather and resulting elevated power prices in Texas incentivized curtailment from our power provider at Odessa,” said Tyler Page, CEO of Cipher. “However, given our best-in-class power structure, we continued to generate positive cashflow in our operations and added to our bitcoin inventory. We ended the month with a bitcoin inventory of ~1,132 bitcoin. Additionally, we are pleased to report that we received the first shipment of our new Bitmain S21 mining rigs and look forward to getting them hashing quickly.”

New Bitmain S21 mining rigs being prepared for deployment

Bitcoin Production and Operations Updates for January 2024
Cipher produced ~371 BTC in January, representing a ~20.4% decrease in production versus the previous month amidst average monthly network hash rate increasing ~3.5%. As part of its regular treasury management process, Cipher sold ~34 BTC in January, ending the month with a balance of ~1,132 BTC.

About Cipher
Cipher is an emerging technology company focused on the development and operation of bitcoin mining data centers. Cipher is dedicated to expanding and strengthening the Bitcoin network's critical infrastructure. Together with its diversely talented team and strategic partnerships, Cipher aims to be a market leader in bitcoin mining growth and innovation. Cipher’s next earnings call is scheduled for March 5^th. To learn more about Cipher, please visit https://www.ciphermining.com/

Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws of the United States. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this press release that are not statements of historical fact, including statements about our beliefs and expectations regarding our future results of operations and financial position, business strategy, timing and likelihood of success, potential expansion of or additional bitcoin mining data centers, expectations regarding the operations of mining centers, and management plans and objectives, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These forward-looking statements generally are identified by the words “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “seeks,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “strategy,” “future,” “forecasts,” “opportunity,” “predicts,” “potential,” “would,” “will likely result,” “continue,” and similar expressions (including the negative versions of such words or expressions).

These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Cipher and our management, are inherently uncertain. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: volatility in the price of Cipher’s securities due to a variety of factors, including changes in the competitive and regulated industry in which Cipher operates, variations in performance across competitors, changes in laws and regulations affecting Cipher’s business, and the ability to implement business plans, forecasts, and other expectations and to identify and realize additional opportunities. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 14, 2023, and in Cipher’s subsequent filings with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Cipher assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

Contacts:
Investor Contact:
Josh Kane
Head of Investor Relations at Cipher Mining
josh.kane@ciphermining.com

Media Contact:
Ryan Dicovitsky / Kendal Till
Dukas Linden Public Relations
CipherMining@DLPR.com

¹ Represents unaudited power sales estimates for the month of January (based on current meter data and nodal prices) divided by the bitcoin price as of January 31, 2024 of ~$41,972

 

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/243d0c39-f7c9-4dd2-a216-7032a9d203fb

 

FAQ

What are the key highlights of Cipher Mining Inc.'s production and operations update for January 2024?

The key highlights include BTC mined, power sales equivalent BTC, BTC sold, BTC held, deployed mining rigs, and month-end operating hash rate.

What was the bitcoin production and operations update for January 2024?

Cipher produced approximately 371 BTC in January, with a decrease of about 20.4% compared to the previous month. The company sold about 34 BTC and ended the month with a balance of around 1,132 BTC.

What challenges did Cipher Mining Inc. face in January 2024?

The company faced challenging market conditions for bitcoin miners, including spikes in network hash rate, lower transaction fees, and elevated power prices in Texas.

How did Cipher Mining Inc. respond to the challenges in January 2024?

Despite the challenges, Cipher continued to generate positive cashflow in its operations and added to its bitcoin inventory, ending the month with approximately 1,132 BTC.

What new mining rigs did Cipher Mining Inc. receive in January 2024?

The company received the first shipment of new Bitmain S21 mining rigs and is preparing them for deployment.