In a significant move, New York-headquartered power generator and bitcoin mining firm Greenidge Generation has abandoned its previous bitcoin liquidation policy, opting instead to adopt a retention strategy. The company announced the plan on Thursday, stating that it will accumulate bitcoin from its proprietary mining business to balance its liquidity position with additional revenue from its hosting business and electricity sales.
Greenidge’s decision to retain more of its mined bitcoin marks a significant shift from its previous treasury strategy, which involved liquidating almost all of its digital assets. As of March 31, the company held only $301,000 worth of bitcoin. However, with its expanded mining operations and growing revenue streams, Greenidge believes that retaining more of its bitcoin is a logical evolution of its strategy.
“We believe in both bitcoin and Greenidge’s long-term growth prospects,” said Greenidge CEO Jordan Kovler. “As we continue to expand our mining operations across the country, retaining more of the bitcoin we earn from our self-mining activities is a natural progression of our strategy.”
Greenidge’s mining operations have been gaining momentum, with the company boasting 122 megawatts of total energy capability. In the first quarter, it mined 134 BTC for its own account and 275 BTC on behalf of NYDIG. The company’s average cost of revenue across its power, bitcoin mining, and hosting segments was approximately $59.8 per megawatt-hour (mWh) during Q1.
To support its expansion and bitcoin retention strategy, Greenidge has signed a stock purchase agreement with B. Riley Principal Capital. Under the agreement, Greenidge has the option to sell up to $20 million of its Class A common stock to B. Riley, providing the company with additional capital to drive growth and development.
The move is seen as a positive development for Greenidge, which has been expanding its mining operations and diversifying its revenue streams. By retaining more of its bitcoin, the company can reduce its reliance on liquidating its digital assets and instead focus on growing its mining business and generating additional revenue from its hosting and electricity sales.
As the bitcoin mining landscape continues to evolve, Greenidge’s decision to adopt a retention strategy is a significant development that could have implications for the broader industry. With its expanded mining operations and growing revenue streams, Greenidge is well-positioned to capitalize on the growing demand for bitcoin and other digital assets.
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