Canadian Bitcoin miner Bitfarms gains ‘Stronghold’ in US with merger completion

Bitfarms has completed buying Stronghold Digital Mining (SDIG). This makes Bitfarms the biggest Bitcoin miner in the PJM market and gives it a much bigger presence in the US, ” the world crypto capital.”

The acquisition, with a transaction value of more than $110 million, will become the largest merger and acquisition case between two listed Bitcoin mining companies. 

Bitfarms bought Stronghold in a stock-for-stock merger. For every share of Stronghold that a shareholder owned, they got 2.52 shares of Bitfarms. To that end, Stronghold then became a fully owned subsidiary of Bitfarms. 

Since the deal is now official, about 59,678,164 Bitfarms common shares and 10,574,848 Bitfarms warrants are being given out. Also, around $44.5 million was paid at closing to pay off any remaining Stronghold loans.

Based on Bitfarms’ current market value of $553 million and the number of shares outstanding, this is a big loss for current shareholders—about 21%. However, the assets that were bought give the business a lot more operating scale and new ways to make money.

What does this acquisition mean for Bitfarms?

Bitfarms’s decision to buy Stronghold Digital Mining is a big strategic move that improves the company’s operations and position in the crypto mining market.

The most interesting thing might be that it is the best place to build AI and high-performance computer (HPC) systems. As partners WWT and ASG prepare to turn the sites they bought into HPC/AI facilities, Bitfarms has more choices than just crypto mining. That could mean more stable ways to make money that don’t depend as much on how much Bitcoin costs.

The deal also gives Bitfarms a bigger energy portfolio right away, with 623 Megawatts Under Management and an extra 1.1 GW in the works for growth in Pennsylvania.

The acquisition also changes where Bitfarms does business. It will do 80% of its work in North America by the end of 2025. This could make the business less risky. Bitfarms now has most of the largest energy markets in North America.

Bitfarms CEO Ben Gagnon said, “The completion of this strategic acquisition further expands our U.S. footprint and makes us the industry leader in the PJM market […] This marks the start of an exciting new chapter for Bitfarms, and we’re thrilled to welcome the talented Stronghold team to write that chapter with us.”

Riot Platforms, the second-biggest Bitcoin miner in the world, tried to take over Bitfarms. But they failed, so they chose to keep a 20% share.

This Friday, the US Securities and Exchange Commission (SEC) will also hold a meeting with leaders in the crypto business to discuss how crypto assets can be used as securities. This meeting is likely to affect how crypto industry regulation will change in the future.

BITF stands for Bitfarms shares, which are selling slightly lower on the NASDAQ and the Toronto Stock Exchange before the market opens. After the market opens, Stronghold will no longer trade on the NASDAQ under the code SDIG.

Purchase amidst BTC downturn – Is this good timing?

Bitcoin has gained more traction ever since the US president started rooting for it. Although the government will not be purchasing more Bitcoin, the coin stands a chance to be a strategic reserve in the lead nation economically.  

In addition, BTC evangelist Michael Saylor says that the coin is a good investment. Strategy has been buying Bitcoin regularly since the end of October. 

A statement with the US Securities and Exchange Commission today shows that the company that used to be MicroStrategy bought 130 Bitcoin from March 10 to March 16 at an average price of about $82,981. It now has about $41.6 billion worth of Bitcoin.

Furthermore, this is what Trump wanted: that Bitcoin mining and Bitcoin investments go back to America. Meanwhile, Strategy shares are up about 2.7% so far this year, while Bitcoin is down about 11%.

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