Galaxy Digital Holdings CEO Mike Novogratz has called the Helios mining deal a “transformative acquisition” for the company as it works to increase exposure to the Bitcoin mining sector.
The crypto investment firm’s $65 million acquisition of flagship mining facility Argo Blockchain was announced on December 28 as part of Argo’s drastic move to avoid bankruptcy.
Tweeting about the deal on December 29, Novogratz emphasized that Galaxy is a “strong believer” in the long-term future of Bitcoin (BTC) and that the company will continue to increase its mining initiatives:
“It’s a bear market to build on. We’re big believers in BTC and expect the lowest-cost miners to win over time. Helios is a transformative acquisition that will expand our mining capabilities and services as we continue to build for a decentralized future.”
Since we started bitcoin mining in Q1 2021, we outsource our miners to hosting providers. But we always had the idea that we would integrate our mining capabilities vertically.
— Mike Novogratz (@novogratz) December 28, 2022
Explaining the deal in more detail, Galaxy’s CEO explained that the company has a specific “thesis” on how to approach the mining sector that includes “cheap electricity, highly efficient teams” and “buying cheap ASIC miners.”
“This is a recipe for success in mining, even as the hash rate increases,” he said.
The latest data from the Hashrate Index found that Bitcoin ASIC miner prices are hovering at lows not seen since at least 2021, with the most efficient ASIC miners seeing their prices drop 86.8% from their peak in May 2021.
Galaxy has five business lines in trading, asset management, crypto mining, venture capital and investment banking. According to its website, it currently has $1.9 billion in assets under management.
As it stands, Galaxy has mainly used hosting services for its mining operations, but Novogratz noted that having 200 megawatt (MW) capacity of Helios not only allows the company to run miners on its own site, but to host others.
Helios has the potential for a lot of scaling capabilities to make it one of the largest miners on the market. Argo Blockchain previously outlined in May this year that it has plans to increase its electricity capacity to 800MW in “the coming years.”
At the time, the company also said that Helios will reach a BTC mining capacity of 5.5 exahashes per second by the end of the year, with the potential to eventually reach 20 EH/s.
It appears that Galaxy has some cash to splash in the middle of the 2022 bear, as it also gave Argo Blockchain a $35 million equipment loan along with the acquisition.
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The move also adds to another coup from earlier this month when Galaxy took custody of crypto platform GK8 for an undisclosed fee.
GK8 was auctioned off as part of Celsius’ bankruptcy proceedings, after the defunct crypto lender took over the company for $115 million in 2021.
Mike Novogratz, founder and CEO of Galaxy called the acquisition “an important foundation in our efforts to create a full-service financial platform for digital assets.”