Bitcoin mining is having a moment right now, but will it last?

August 6, 2021, 2:43 PM UTC

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Hurl whatever skepticism you want at Bitcoin, but the process of mining the cryptocurrency is, well, stupidly profitable.

That’s according to my colleague, Shawn Tully on the space.

As the price of Bitcoin has skyrocketed, some top miners have taken advantage of low-cost energy sources to clock operating margins upward of 70%, he estimates. That may also have been helped by China, where nearly 50% of mining activity is concentrated, which cracked down on the practice and gave more market share to existing players outside of the country.

Here he is, discussing Canada-based Bitfarms: “So what’s the run rate for Bitfarms’ overall operating margins, encompassing not just mining costs but the other relevant expenses? At mid-day on August 4, Bitcoin’s price had rebounded to over $39,000. At its current output of 400 coins per month, Bitfarms run-rate for revenue is approximately $190 million a year. Its mining costs of electricity and infrastructure remain around $20 million a year. By winning twice as many coins without paying more for power and facilities, it cut mining costs per coin in half from $8,400 to $4,200. In the first quarter, its annualized depreciation and amortization was $12 million and [selling, general, and administrative] expenses were $11 million. All told, its yearly operating expenses appear to be in the $43 million range. If so, its operating profits are clicking at around $150 million a year. That gives Bitfarms an operating margin in the 75% range.

By comparison, in their most recent fiscal years, LVMH posted an operating margin of 18%, Apple 27%, ADP 32%, Microsoft 37%, and Amgen 38%.”

Why not use net income? Operating income after all does not include taxes or financing expenses in the calculation. But as newer companies, net income may skew too heavily to account for these startup costs.

Still, as Tully notes, the good times are unlikely to last, as more folks seek to capitalize on crypto mining. Read more.

SPEAKING OF CRYPTO: There is a battle brewing over crypto’s status in the infrastructure bill in Washington D.C. A provision of the bill could impose tougher tax enforcement on cryptocurrency transactions, with industry proponents saying it could also impact bitcoin miners and stifle innovation if not properly clarified. 

ALSO ON THE INFRASTRUCTURE BILL: Credit rating giant Moody’s yesterday agreed to acquire RMS,a climate risk analysis firm, for about $2 billion from Daily Mail and General Trust. That comes as businesses are increasingly looking to understand the potential impact of climate change on their properties, supply chains, and beyond. But it’s not just companies that are paying attention. Aside from that trend, during our conversation, Moody’s CEO Rob Fauber also pointed to yes, the infrastructure bill. Some $492 million of the bill appears earmarked for mapping and forecasting inland and coastal flooding, with another $50 million for predicting wildfires. Fauber notes that he would “love to partner with the government on that.”

HOUSEKEEPING: I’m off on vacation next week, and leaving this newsletter in the fantastic hands of and Please send all IPO and SPAC information to Jessica, and other deals to Anne until Aug. 13. See you in a week!

Lucinda Shen

Jessica Mathews compiled the IPO and SPAC sections of this newsletter.


- GoGuardian, a Los Angeles-based edtech platform, raised $200 million from Tiger Global Management, valuing the business over $1 billion.

- Bluecore, a New York City-based marketing tech maker, raised $125 million in Series E funding valuing it at $1 billion. Georgian led the round and was joined by investors including FirstMark, Norwest, and Silver Lake Waterman

- Mindtickle, a San Francisco-based sales tech company, raised $100 million in Series E funding valuing it over $1.2 billion. SoftBank Vision Fund 2 led the round and was joined by investors including Norwest Venture Partners, Canaan, NewView Capital, and Qualcomm Ventures. 

- V2food, an Australian alternative protein company, raised €45 million ($63 million) in Series B extension funding. Astanor Ventures led the round.

- ReversingLabs, a Cambridge, Mass.-based business focused on supply chain threats, raised $56 million in Series B funding. Crosspoint Capital Partners led the round and was joined by investors including ForgePoint Capital and Prelude.

- Voi, a European scooter company, raised $45 million in a Series C extension round. The Raine Group led the round.

- Jupiter, an Indian neobank, raised $45 million in Series B funding. Nubank, Global Founders Capital, Sequoia Capital and Matrix Partners India led the round and were joined by investors including  Mirae Assets Venture, Addition Ventures, Tanglin VC, 3one4 Capital, Greyhound, and Beenext.

- Sirona Medical, a San Francisco-based radiology operating system, raised $22.5 million in Series A funding.  8VC led the round.

- Refurbed, a European marketplace for refurbished electronics, raised $54 million in Series B funding. Evli Growth Partners and Almaz Capital led the round, and were joined by investors including Speedinvest, Bonsai Partners, and All Iron Ventures.

- Polywork, a New York City-based professional social network, raised $13 million in Series A funding. Andreessen Horowitz led the round and was joined by investors including Caffeinated Capital, Goldcrest Capital, Bungalow Capital, 20VC, Elad Gil, Nat Friedman, Anthony Pompliano, and Ari Emanuel.

- Statsig, a Seattle-based testing platform, raised $10.4 million in Series A funding. Sequoia Capital led the round and was joined by investors including Madrona Venture Group.

- Offlimits, a New York City-based plant-based cereal brand, raised $2.3 million in funding. Investors included Science, Crosslink, and Canaan.


- Clearlake Capital Group will acquire Cornerstone OnDemand (NASDAQ: CSOD), a Santa Monica, Calif.-based talent management software company, valuing it at about $5.2 billion.

- Goldfinch Partners and The Baupost Group will acquire Western Union Business Solutions, the Denver-based payments and foreign exchange solutions division of Western Union, for roughly $910 million

- Apex Group acquired Greenough Consulting Group, a Burlingame, Calif.-based provider of finance, accounting and human resources services to technology companies, venture capital and private equity funds. Financial terms weren't disclosed.

- Audax Private Equity invested in Team Cymru, a Lake Mary, Fla.-based cyber threat intelligence company. Financial terms weren't disclosed.

- Avathon Capital invested in ReUp Education, an Austin-based reskilling edtech. Financial terms weren't disclosed.

- Mainsail Partners acquired Boostlingo, a language interpretation management software maker. Financial terms weren't disclosed.

- Peak Technologies, backed by Sole Source Capital, acquired DBK Concepts, a Miami-based I.T. services company. Financial terms weren't disclosed.

- Susquehanna Private Capital invested in thebigword Group, a Leeds, U.K.-based language platform. Financial terms weren't disclosed.


- Qualcomm (Nasdaq: QCOM) submitted a bid to buy Veoneer (NYSE: VNE), a Swedish automotive parts firm, for about $4.6 billion, challenging a lower bid from Magna International.

- Coinbase (Nasdaq: COIN) agreed to acquire Zabo, a Burleson, Tx.-based crypto data aggregator. Zabo was backed by investors including Digital Currency Group and Moonshots Capital. Financial terms weren't disclosed.

- NXMH acquired Whitebridge Pet Brands, a pet food brand, from Frontenac Company. Financial terms weren't disclosed.

- SJE, a portfolio company of Audax Group, acquired L.W. Allen, a maker of water and wastewater control systems, from Gen Cap America. Financial terms weren't disclosed.


- Penn National Gaming will buy Score Media and Gaming, a Canadian sports-betting firm, for $2 billion in cash and stock.

- Bayer acquired Vividion Therapeutics for up to $2 billion to boost its ability to discover new treatments and lift the value of its drug pipeline.

- Levi Strauss & Co. (NYSE: LEVI) acquired Beyond Yoga, a Los Angeles-based activewear and athleisure brand. Financial terms weren't disclosed.


- Adagio Therapeutics, Inc., a Waltham, Mass.-based maker of COVID treatments, raised $309.4 million in an offering of 18.2 million shares priced at $17 per share. The company reported a net loss of $65.3 million in 2020 and has yet to post revenue. Fidelity Investments, Mithril, and GV back the firm.

- TypTap Insurance Group, an Ocala, Florid.-based homeowner insurance company and subsidiary of HCI Group Inc., confidentially filed for an IPO, per Reuters


- Footprint, a Gilbert, Ariz.-based wood fiber paper product company seeking to eliminate single-use plastics, is in discussions to go public via a merger with SPAC Gores Holdings VII Inc., per Bloomberg.

- EQRx Inc., a Cambridge, Mass.-based medicine development company, will go public via a merger with CM Life Sciences III, a SPAC backed by activist investor Keith Meister and life sciences investor Eli Casdin. The deal values the business at about $3.7 billion.


- ArchiMed, a French buyout group, closed its small-cap focused MED III at €650 million.

- NewSpring, a Radnor, Pa.-based private investor, raised  $364.3 million for its fourth mezzanine fund.

- Harlan Capital Partners, a New York City-based investor, closed Harlan Special Opportunities Fund IV at $111 million.

- Stage 2 Capital, a Boston-based venture capital fund, launched a $80 million Fund II.

- AE Industrial Partners will manage and invest in The Boeing Company’s HorizonX Ventures, its venture capital fund. Financial terms weren't disclosed.


- Scale Venture Partners, a Foster City, Calif.-based early-stage enterprise tech VC, promoted Eric Anderson to partner. 

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