Digihost Announces 65% Year-Over-Year Increase in Bitcoin Mined and Provides January 2024 Production Update
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Insights
The report from Digihost Technology Inc. indicates a significant increase in Bitcoin (BTC) production, which is a crucial metric for investors as it directly affects the company's revenue stream in the highly volatile cryptocurrency market. The 30% month-over-month and 65% year-over-year increase in daily BTC mined suggests an improvement in operational efficiency and/or an expansion in mining capacity. Despite the challenges posed by extreme weather conditions, the company's ability to increase output is a positive signal of resilience and operational adaptability.
From a financial perspective, the company's strategy to self-fund energy costs by liquidating a portion of BTC production minimizes equity dilution and can be seen as a shareholder-friendly approach. However, the reliance on the fluctuating price of BTC to fund operations introduces a level of risk that must be monitored closely. With approximately $3.7 million in cash, BTC and cash deposits, the company appears to have a stable liquidity position, though the capital expenditure of $0.3 million should be weighed against the company's growth strategy and current assets.
The cryptocurrency sector is known for its high volatility and sensitivity to external factors such as regulatory changes and market sentiment. Digihost's operation update, reflecting a substantial increase in mining capacity and efficiency, may positively influence investor sentiment in the short term. However, the long-term impact on the stock market will depend on the sustainability of these production levels and the company's ability to manage operational costs amidst the volatility of BTC prices.
It is also important to note that the company's decision not to purchase or sell miners during the reported month may indicate a strategic choice to optimize current resources rather than expand through additional capital outlays. This decision could be interpreted as a cautious approach in an uncertain market, potentially aligning with a risk-averse investment strategy.
The mention of extreme weather conditions impacting Digihost's operations highlights the energy-intensive nature of cryptocurrency mining and the sector's susceptibility to environmental factors. The company's operational update indicates a robust infrastructure capable of sustaining 90MW of power across three sites, which is a substantial energy demand. The ability to maintain and even increase production under such conditions is a testament to the company's infrastructure resilience.
Investors with an interest in sustainability may scrutinize the energy sources and efficiency measures employed by the company, as the environmental impact of mining operations is an increasingly important consideration. The operational update lacks detail on these aspects, which could be a point of inquiry for stakeholders focused on environmental, social and governance (ESG) criteria.
This news release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated March 4, 2022 to its short form base shelf prospectus dated February 23, 2022
HOUSTON, Feb. 01, 2024 (GLOBE NEWSWIRE) -- Digihost Technology Inc. (“Digihost” or the “Company”) (Nasdaq: DGHI; TSXV: DGHI), an innovative U.S. based blockchain technology and computer infrastructure company, is pleased to provide unaudited comparative Bitcoin (“BTC”) production results for the month ended January 31, 2024, combined with an operations update. All monetary references are expressed in USD unless otherwise indicated.
Monthly Production Highlights for January 2024
- Mined approximately 107 BTC. Daily BTC mined during the month increased by
30% compared to December 2023, as despite less-than-optimal conditions for mining due to extreme weather conditions experienced in the month of January that led the Company to pause operations for a few days, on a month-over-month basis the Company was able to increase its mining output due to the growth in operating capacity previously disclosed.
- On a year-over-year basis, the Company increased its daily BTC mined by
65% compared to January 2023.
- The Company held cash, BTC and cash deposits of approximately
$3.7 million as of January 31, 2024 (based on a BTC price of$42,758 as of January 31, 2024 per CoinMarketCap), which was comparable to Digihost’s cash, BTC and cash deposits of$2.8 million as of December 31, 2023 (based on a BTC price of$42,265 as of December 31, 2023 per CoinMarketCap).
- Spent approximately
$0.3 million on capital expenditures, mining infrastructure support equipment and collateral deposits. Digihost continues to monitor its capital expenditures closely with self-funding to limit equity dilution for its shareholders.
- Consistent with management’s ongoing commitment to minimize equity dilution for its shareholders, the Company has continued to monetize a portion of its BTC production to fully fund its energy costs.
- The Company did not purchase or sell any miners during the month.
Operations Update
Presently, Digihost’s consolidated operating capacity across its three sites represents approximately 90MW of available power and is mining at hashrate of 2 EH/s.
About Digihost
Digihost is a growth-oriented technology company focused on the blockchain industry. The Company operates from three sites in the U.S. and, in addition to managing its own operations, provides hosting arrangements at its facilities.
For further information, please contact:
Digihost Technology Inc.
www.digihost.ca
Michel Amar, Chief Executive Officer
T: 1-818-280-9758
Email: michel@digihost.ca
Cautionary Statement
Trading in the securities of the Company should be considered highly speculative. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
Except for the statements of historical fact, this news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) that are based on expectations, estimates and projections as at the date of this news release and are covered by safe harbors under Canadian and United States securities laws. Forward-looking information in this news release includes information about potential further improvements to profitability and efficiency across mining operations, including, as a result of the Company’s expansion efforts, potential for the Company’s long-term growth, and the business goals and objectives of the Company. Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to: future capital needs and uncertainty of additional financing, including the Company’s ability to utilize the Company’s at-the-market offering program (the “ATM Program”) and the prices at which the Company may sell securities in the ATM Program, as well as capital market conditions in general; share dilution resulting from the ATM Program and from other equity issuances; risks relating to the strategy of maintaining and increasing Bitcoin holdings and the impact of depreciating Bitcoin prices on working capital; regulatory and other unanticipated issues that prohibit us from declaring or paying dividends to our shareholders that are payable in Bitcoin; continued effects of the COVID19 pandemic may have a material adverse effect on the Company’s performance as supply chains are disrupted and prevent the Company from operating its assets; development of additional facilities and installation of infrastructure to expand operations may not be completed on the timelines anticipated by the Company, or at all; ability to access additional power from the local power grid; a decrease in cryptocurrency pricing, volume of transaction activity or generally, the profitability of cryptocurrency mining; further improvements to profitability and efficiency may not be realized; the digital currency market; the Company’s ability to successfully mine digital currency on the cloud; the Company may not be able to profitably liquidate its current digital currency inventory, or at all; a decline in digital currency prices may have a significant negative impact on the Company’s operations; the volatility of digital currency prices; and other related risks as more fully set out in the Annual Information Form of the Company and other documents disclosed under the Company’s filings at www.sedarplus.ca. The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. In connection with the forward-looking information contained in this news release, the Company has made assumptions about: the current profitability in mining cryptocurrency (including pricing and volume of current transaction activity); profitable use of the Company’s assets going forward; the Company’s ability to profitably liquidate its digital currency inventory as required; historical prices of digital currencies and the ability of the Company to mine digital currencies on the cloud will be consistent with historical prices; the ability to maintain reliable and economical sources of power to run its cryptocurrency mining assets; the negative impact of regulatory changes in the energy regimes in the jurisdictions in which the Company operates; the ability to adhere to Digihost’s dividend policy and the timing and quantum of dividends based on, among other things, the Company’s operating results, cash flow and financial condition, Digihost’s current and anticipated capital requirements, and general business conditions; and there will be no regulation or law that will prevent the Company from operating its business. The Company has also assumed that no significant events occur outside of the Company's normal course of business. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainties therein.
FAQ
How many BTC did Digihost mine in January 2024?
What was the percentage increase in daily BTC mined compared to December 2023?
How much cash, BTC, and cash deposits did Digihost hold as of January 31, 2024?
What is the consolidated operating capacity across Digihost's three sites?
At what hashrate is Digihost mining?
