Bitmain-Backed BitFuFu Reports 23 EH/s of Bitcoin Hashrate

BitFuFu leases miners from Bitmain to mine 10,333 bitcoin in 2023 for itself and for cloud mining customers

Bitmain-invested bitcoin mining and cloud mining platform BitFuFu has expanded the hashrate under its operation from 15 EH/s as of June 30 to nearly 23 EH/s as of the end of 2023, it said on Thursday.

In an earnings release for 2023, BitFuFu disclosed that it generated a total revenue of $284 million last year. The cloud mining segment contributed $178 million by mining 6,756 BTC for its customers while the proprietary mining segment generated 3,577 bitcoin with a revenue of $100 million.

As previously reported, BitFuFu is essentially in a hashrate management business as the majority of its mining fleet is leased from Bitmain and it relies on Bitmain’s facilities to host the miners in multiple regions including the U.S.

Notably, BitFuFu incurred $166.5 million in 2023 as a cost of revenue to a related party, which was Bitmain. That accounted for 60% of BitFuFu’s $278 million revenues that were made from cloud mining and proprietary mining in the whole year.

As the chart below shows, BitFuFu has been paying a significant amount of its revenue to Bitmain for leasing its miners and hosting the miners at its facilities, although the percentage did decline in the second half of 2023.

BitFuFu appears to have scaled down the hashrate allocated for proprietary mining during the second half of 2023 and added more capacities to its cloud mining segment.

However, it is unclear what type of customers were buying BitFuFu’s cloud mining products. Based on the product specifications advertised on BitFuFu’s website, a customer who buys a 180-day S19XP contract would be effectively paying for an operational cost of $0.147/kWh.