Gryphon to End Bitcoin Mining Hosting Agreement with Coinmint

Bitcoin mining firm Gryphon Digital is set to terminate its colocation agreement with New York hosting partner Coinmint by the end of the year.

In a filing on Friday, Gryphon announced that it had notified Coinmint of its decision to not renew the colocation partnership. Under this agreement, Gryphon had been utilizing approximately 27 megawatts of power capacity at Coinmint’s facility. Gryphon anticipates announcing new locations before the Coinmint agreement concludes on January 1.

Gryphon has become the latest public mining company to discontinue its hosting arrangement with Coinmint due to the pressure on operational margins following Bitcoin’s hashprice squeeze after the halving, which has impacted Gryphon’s levered, asset-light mining model.

Gryphon initially entered the hosting partnership with Coinmint in July 2021 to colocate around 7,200 Antminer S19j Pros. Coinmint directly passed through the electricity and maintenance costs to Gryphon while collecting a portion of Gryphon’s mined Bitcoin.

According to Gryphon’s 2023 annual report, the electricity cost as of December 31, 2023, was $0.073/kWh with a 52-week rolling average of $0.066/kWh. Following Bitcoin’s halving event, the network’s mining revenue fell to historic lows and currently stands at approximately $0.064/kWh for the Antminer S19j Pro model.

A notable financial move by Gryphon was signing an equipment loan in May 2022 with Anchorage for 933 BTC at an annual interest rate of 5%. The loan, payable in BTC, was secured by the 7,200 S19j Pro Antminers and the colocation agreement with Coinmint.

Last month, Gryphon restructured the debt with Anchorage, converting a portion of the remaining loans into equities. This reduced the outstanding debt balance from $18 million to $3 million. The restructured interest rate was lowered to 4.25%, and the outstanding balance is now payable in USD instead of BTC.