Bitcoin Miner Inks SPAC Deal

Crypto Miner Garners $4.3 Billion Valuation

Core Scientific, one of North America’s largest cryptocurrency miners, is going public via a SPAC deal with Power & Digital Infrastructure Acquisition Corp (XPDI). The deal values Core Scientific at about $4.3 billion. That is much higher than rivals Riot Blockchain (RIOT), which sports a market cap of $2.18 billion, and Marathon Digital (MARA), which has a value of around $2.25 billion.

In addition to mining for cryptocurrency, Core Scientific is one of the biggest providers of infrastructure and hosting for the blockchain market. The company is a heavy hitter in the industry with a variety of blockchain and crypto infrastructure patents and applications.

Core Out-Mines Rivals

Core earned $60 million in sales in 2020, and the company predicts that will increase to $493 million this year. Though the company’s main business is mining for crypto. It has minted over 3,000 bitcoin so far in 2021. Of that, 1,683 are for its own account.

Core’s rival, Marathon, minted 846 bitcoin in the same period while Riot minted 1,167. Core is also seeing increased demand for its infrastructure—so much so that it sold out of capacity through 2022. To meet the mining demand, it is adding to its existing capacity and is looking at opening new sites in more states. Core will use $300 million of the deal proceeds for growth.

Miners Offer Investors Diversification

SPAC deals with bitcoin miners provide another way for investors to have exposure to cryptocurrency. As bitcoin prices fluctuate, mining companies are a way for crypto enthusiasts to diversify while still being involved in the industry.

Businesses like Core are not without criticism. Mining for digital tokens requires a lot of energy which negatively impacts the environment. Core tries to minimize that with 56% of its electricity coming from solar, wind, hydro, and nuclear. To achieve 100% net carbon neutrality, it buys carbon credits to offset the rest.

From its advanced mining abilities to its environmentally focused approach, there are a lot of reasons Core is commanding a heftier valuation than its rivals. It will be interesting if that remains true once it begins trading as a public company.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

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