Cipher Mining Technologies said on Friday that it has agreed to go public through a merger with blank-check firm, Good Works Acquisition Corp., giving the cryptocurrency miner an enterprise value of $2.0 billion.
The combined company will receive $595 million in cash, which includes $170 million held in Good Works’ trust account from its IPO that occurred in October 2020. The cash amount, which will be used to fund the build out of Cipher’s mining facilities, also includes $425 million from investors, including Fidelity and Morgan Stanley.
Cipher will be listed on Nasdaq following the deal, which allows the firm to float its stocks via a backdoor listing and avoid the regulatory complexities of a formal IPO process. Going public through a traditional route can take longer to secure more regulatory approvals. The Securities and Exchange Commission will still need to approve Cipher’s proxy filing.
Cipher is a subsidiary of blockchain infrastructure provider, BitFury Group. It will now operate as a stand-alone company, positioned as the US-centric bitcoin mining arm that plans to reach a cumulative capacity of 745MW by the end of 2025.
Bitfury, which has offices in the United States and overseas, started out as a Bitcoin miner and has since expanded to become one of the largest private infrastructure providers in the blockchain ecosystem. Founded in 2011, the San Francisco-based group provides hardware and software around blockchain technology, including tools designed to investigate the crypto-based networks for suspicious activity.
In 2019, Bitfury sold its joint crypto mining venture, which is one the largest farms in North America, to Hut 8 Mining Corp, a Canadian company involved in digital asset mining, for $7 million.
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“With this transaction, we will be able to combine the formidable skill sets and technologies developed by Bitfury Group over the past 10 years with what we believe will be a leadership position on the global cost curve, and thereby create a true leader in the Bitcoin mining industry. We believe that our U.S. domicile provides us additional advantages of low-cost, reliable power and a transparent, stable and secure regulatory and corporate environment,” said Cipher Mining’s CEO, Tyler Page.
The surge in crypto prices has been reflected in the revenue amassed by miners with recent data showing they were able to bring in $1.09 billion in January. February’s figures were also on track to surpass the record monthly revenue of $1.25 billion for bitcoin miners recorded in December 2017.
Although mining bitcoin is finally profitable again, recently the business has become more expensive due to a bidding war for mining equipment. The rising tide of Bitcoin prices allows buyers of the latest ASIC machines to resell them at premiums of at least 70 percent.