Genesis Digital Assets raises $125M as mining sector pivots to the west

Genesis Digital Assets has become the latest Bitcoin mining firm to raise millions towards plans for aggressive expansion amid the exodus of miners from China due to its crackdown on the sector.

On July 28, Genesis announced it had closed a $125 million equity funding round led by U.K.-based Kingsway Capital. The capital will be mobilized to purchase mining hardware and launch new data centers in the United States and Nordic region.

The terms of the deal will also see Kingsway Capital CEO, Manuel Stotz, join Genesis’ board of directors. Stotz highlighted Genesis’ extensive experience in mining. “The GDA team has been building highly profitable large-scale Bitcoin mining farms for nearly eight years and the industry has only been around for twelve,” he said, adding:

“Bitcoin is going to be the most important technology for financial inclusion of the global poor and unbanked and mining provides security to make this possible.”

Genesis currently represents a total hashrate of 2.6 exahashes per second (EH/s), equal to more than 2.6% of global hashrate. The firm expects to increase its capacity by a further 5.5 exahashes by the end of 2023, targeting a data center capacity of more than one gigawatt.

Since launching in 2013, Genesis estimates it has mined more than $1 billion worth of Bitcoin.

Genesis is not alone in looking to raise to expand its operations amid China’s mining crackdown, with U.S. miner Stronghold filing for a $100 million Initial Public Offering (IPO) on July 27 to expand its operational hashrate by at roughly 75% from 3,000 petahashes per second (PH/s) to 5,300.

Related: Law professor calls for crypto mining regulation during US Senate hearing

On July 28, Chinese-based BIT Mining announced it had entered into an agreement to acquire 2,500 new mining machines worth $6.6 million for deployment in Kazakhstan, anticipating a hashrate increase of 165 PH/s.

Despite the aggressive moves from industrial-scale mining firms to scale their operations outside of China, Cointelegraph reported that hashrate has become increasingly decentralized over the past 12 months, with smaller firms increasing their share of global hashing power.

Cointelegraph also reported that Chinese hashrate had been steadily declining for more than one year leading up to the crackdown, with China’s hash power shrinking from 75.5% of the global total in September 2019 to 46% as of April 2021.