💰️ Cipher Mining Secured a $50m Investment from Softbank

• The investment involves SoftBank purchasing 10.4m shares of Cipher Mining's stock. The funding will support Cipher's HPC and AI data center infrastructure.

• Cipher signed a one-month exclusivity agreement with SoftBank for its 300 MW Barber Lake site in Texas.

• JPMorgan analysts view the deal as a "sign of things to come" for Bitcoin miners diversifying into AI.

• SoftBank is investing heavily in AI and cloud computing, including backing the Stargate AI initiative, a $500b project.

🛑 Bitcoin Miners Catch a Break as Hashrate Growth Slows

After a challenging 2024 for Bitcoin miners, the industry may finally see some relief as competition begins to cool. The network hashrate is expected to slow due to a decrease in mining difficulty and a drop in demand for mining hardware.

On January 27, mining difficulty fell to 108.1 T, the first reduction of 2025, while the hashrate currently sits at approximately 832 EH/s, according to CryptoQuant.

Data from TheMinerMag also indicates a 2.12% decline in mining difficulty over the past week, alongside a notable reduction in ASIC and mining hardware preorders from US firms in the latter half of 2024. Given last year’s record-high difficulty levels and the post-halving block subsidy cut, this adjustment offers some relief for miners.

To navigate these challenges, mining companies diversified their operations in 2024, expanding into AI and high-performance computing data centers. Many also increased their Bitcoin treasury holdings to capture long-term price appreciation. However, despite these efforts and a historic Bitcoin price rally in November, most mining stocks underperformed compared to BTC.

A further setback came with the release of DeepSeek R1, a generative AI model developed in China that rivals OpenAI’s technology but was trained at a fraction of the cost, reportedly just $6m.

The model’s efficiency challenged existing assumptions about AI development costs and sent shockwaves through the market. The news triggered a massive sell-off in AI-related stocks, including Nvidia, wiping out over $1t in shareholder value in a single day.

Investors grew concerned about the impact of DeepSeek on the profitability of data centers and high-end AI processors, further complicating the outlook for miners relying on AI-driven diversification.

🇺🇸 Trump’s Executive Order on Crypto Stockpile Omits Bitcoin Mention

The Bitcoin community is frustrated with the vague language in President Trump’s executive order to study a “digital asset stockpile,” as it does not explicitly mention Bitcoin. Some fear that the order could include other cryptocurrencies rather than focusing solely on Bitcoin, as Trump had previously suggested.

The order mandates a working group to explore using crypto assets, potentially seized by the government, to build a national reserve. While some, like Satoshi Action Fund’s Dennis Porter, argue that the term “digital assets” is pragmatic and politically neutral, others, including Riot Platforms’ Pierre Rochard, see it as a potential gateway for altcoins, particularly Ripple, to influence the reserve’s composition.

Currently, the U.S. government holds approximately $20.4b in Bitcoin, making up nearly 98% of its crypto holdings, alongside smaller amounts of Ether and other altcoins. Trump’s AI and crypto policy lead, David Sacks, has stated that no final decision has been made on whether to proceed with the stockpile, and the study will determine its feasibility.

⛏️ In The News

• Grayscale has launched the Bitcoin Miners ETF (MNRS), offering investors exposure to Bitcoin mining firms without direct BTC investment, amid struggling mining stocks that failed to match Bitcoin’s 113% gains in 2024.

• Russia’s largest power grid operator, Rosseti, plans to support Bitcoin mining by utilizing underloaded power centers, introducing specialized tariffs, and coordinating mining infrastructure placement to optimize energy use and boost revenues.

• Bitfarms is selling its largest Paraguay mining facility to Hive Digital for $85m, redirecting the capital to expand its Bitcoin and AI infrastructure in the US as part of a broader shift toward North American operations.

• DCG has spun off Fortitude Mining as a standalone mining subsidiary, signaling its push for institutional exposure to diversified mined crypto assets, while Foundry continues to dominate the Bitcoin mining pool with over 30% of the network’s hashrate.

• Establishing a Bitcoin reserve will be a key legislative priority for Texas in 2025, according to Lieutenant Governor Dan Patrick, as the state joins others like Arizona and Utah in exploring crypto reserves while lawmakers push for legislation allowing taxes and fees to be paid in BTC.

• Investment firm D.E. Shaw has built a stake in Riot Platforms, making it the second activist investor in recent months to push for changes, including a potential shift toward AI and high-performance computing at the Bitcoin miner’s Texas site.

• A $400 Bitcoin mining rig, boosted by additional hashrate donations, helped The 256 Foundation mine a block worth $330K, showcasing the potential for small-scale miners to participate in the Bitcoin network.

• Bitfarms has engaged ASG and World Wide Technology to evaluate its North American sites for HPC and AI potential, seeking to maximize its 1.2 GW portfolio's value, attract long-term customers, and secure steady revenue.

🇺🇸 US Bitcoin ETF inflows by day