Digital Currency Group (DCG) has announced the creation of Fortitude Mining, a new subsidiary focused on cryptocurrency mining. This move signals DCG’s intention to provide institutional investors with exposure to a diversified portfolio of mined crypto assets.
Fortitude Mining was previously the mining division of Foundry, a decentralized mining and staking service. Andrea Childs, who joined Foundry in 2020, will lead Fortitude Mining as CEO.
Restructuring and Consolidation
The spinout of Fortitude Mining may be related to Foundry’s restructuring efforts. In December, Foundry laid off 16% of its U.S. workforce to concentrate on its core Bitcoin mining operations. Foundry currently boasts the largest Bitcoin mining pool, controlling over 30% of the network’s hashrate.
The Bitcoin mining industry has faced renewed challenges since the network’s fourth halving event in April 2024.
- Increased M&A Activity: Galaxy Digital reported $460 million in reverse mergers and acquisitions in the first half of 2024, predicting further consolidation as smaller miners struggle. Architect Partners also noted a surge in M&A activity as larger companies seek to expand data center capacity and access cheaper energy.
- Bitcoin Accumulation: Publicly traded miners like MARA Holdings, Riot Platforms, and Hut 8 have been building up their Bitcoin reserves, as reported by Cointelegraph.
- Shift in Strategy: A January 7 report by Digital Mining Solutions and BitcoinMiningStock.io highlighted a trend among Bitcoin miners to hold onto a larger portion of their mined Bitcoin or refrain from selling altogether. The report also indicated that four of the 16 largest Bitcoin holders are miners.
What The Author Thinks
DCG’s decision to spin out Fortitude Mining appears to be a strategic move to capitalize on the evolving dynamics of the cryptocurrency mining industry. By creating a separate entity focused on diversified mining operations, DCG can potentially attract institutional investors seeking exposure to a broader range of digital assets. This move could also provide DCG with greater flexibility to navigate the challenges and opportunities presented by the post-halving environment.
Featured image credit: Freepik
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