The Galaxy CEO seemed undaunted by this year’s devastation in the BTC mining business, stating that the company plans to dramatically increase its mining activities. Galaxy Digital Holdings CEO Mike Novogratz describes the Helios mining purchase as a game changer for the company. Bear markets are for construction. We are long-term supporters of $BTC and think that the lowest-cost miners will triumph over time.
Helios is a game changer that will broaden our mining capabilities and services as we continue to develop towards a decentralized future. In a more detailed explanation of the transaction, Mike Novogratz stated that the business has a certain philosophy on how to approach the mining sector- low-cost power, a very efficient staff, and buying ASIC miners cheaply. Previously, Argo Blockchain CEO Peter Wall announced on December 28 a $65 million transaction with Galaxy Digital to sell the Helios mining operation.
The crypto investment business announced the $65 million acquisition of Argo Blockchain’s main mining operation on December 28 as part of Argo’s extreme measures to avoid bankruptcy. In a tweet regarding the acquisition on December 29, Novogratz stated that Galaxy is a “big believer” in Bitcoin’s long-term prospects and that the firm would continue to scale up its mining initiatives:
The Galaxy CEO went on to explain that the company has an unique “thesis” on how to approach the mining sector: “low-cost power, a highly efficient crew,” and “purchasing ASIC miners inexpensively.” “That’s a prescription for mining success, even as the hash rate climbs,” he added.
According to Hash rate Index, Bitcoin ASIC miner prices are at a level not seen since at least 2021, with the most efficient ASIC miners seeing their prices collapse 86.8% from their high in May 2021. Galaxy offers five business lines: trading, asset management, cryptocurrency mining, venture capital, and investment banking.
According to its website, it presently manages assets worth $1.9 billion. Galaxy now relies heavily on hosting services for its mining activities. However, Novogratz points out that Helios’ 200 megawatt (MW) capacity will allow the firm to not only run miners on its own site, but also host for others.
Helios has the potential to become one of the largest miners on the market. Argo Blockchain earlier stated in May of this year that it intended to expand its energy capacity to 800MW in the “coming years.” At the time, Helios claimed it intended to attain a BTC mining capacity of 5.5 exahashes per second by the end of the year, with the potential to reach 20 EH/s in the future.
Galaxy looks to have some capital to burn during the 2022 bear market, since it also provided Argo Blockchain with a $35 million equipment financing loan as part of the deal. The acquisition follows Galaxy’s earlier this month acquisition of crypto self-custody platform GK8 for an unknown sum.
GK8 was auctioned off as part of the Celsius bankruptcy process, after the failed crypto lender purchased the company for $115 million in 2021. The purchase, according to Novogratz, is a “critical cornerstone in our endeavour to develop a genuinely full-service financial platform for digital assets.”