New York Power Plant Sells Bitcoin Hashpower to Institutional Investors

A Bitcoin-mining power plant in upstate New York has sold 106 petahash of its computing power to an undisclosed buyer using a “hashpower contract” settled in Bitcoin (BTC).

The contract — brokered by BitOoda Digital — first launched in January with the aim of providing institutional investors to purchase large blocks of Bitcoin hashpower in over-the-counter markets.

On April 10, the chief financial officer of Greenidge Generation claimed that the new instrument provides:

“The same kind of time-tested hedging capabilities seen in traditional commodity markets [...] bring[ing] the benefits of clean and energy-efficient bitcoin mining from Greenidge to institutional investors throughout the United States.”

A sweet deal for investors?

The Greenidge power plant uses a pipeline bringing natural gas directly to the plant, thereby generating the power consumed by its mining facility — up to 100 megawatts of energy an hour — and lowering its costs. The firm argues that this set-up offers investors a chance to tap the profitability not only of crypto, but also the energy markets.

The new, regulated contract enables investors to own Bitcoin cheaper than the market spot price, with the instrument being physically settled — i.e. delivered in the Bitcoin generated at the power plant. For Greenidge, the deal provides upfront capital for expanding its mining operations.

Resources and mining profitability

As recently reported, Greenidge is owned by private equity Atlas Holding, which installed 7,000 crypto mining machines at the Greenidge 65,000-square-foot power plant in Dresden, New York. 

Given the forthcoming 50% reduction in rewards for mining each block on the Bitcoin network — an event known as “halving,” scheduled for May 2020 — research by TradeBlock has indicated that access to efficient mining equipment, together with cheaper electricity and resources, can help the sector to ward against losses.