Cipher Digital Inc. (CIFR)

Cipher Mining Inc. is an emerging technology company that develops and operates industrial-scale bitcoin mining data centers in the United States, with bitcoin mining as its principal revenue-generating activity. Through itself and consolidated subsidiaries, including Cipher Mining Technologies Inc., the company operates four bitcoin mining data centers in Texas: the wholly-owned Odessa Facility (207 MW, ~6.4 EH/s), and three partially-owned facilities held through a joint venture with WindHQ LLC—Alborz (40 MW, powered by an adjacent wind farm), Bear, and Chief (each 10 MW, grid-connected)—in which Cipher holds 49% membership interests. The company is also developing an additional facility, the Black Pearl Facility in Winkler County, TX, with conditional interconnection approval for up to 300 MW, expecting to energize 150 MW in 2025 using approximately 37,396 Antminer T21 miners.

As of February 29, 2024, Cipher operated approximately 80,000 miners (owning about 70,000) with aggregate hashrate capacity of roughly 8.4 EH/s across about 267 MW of deployed electrical capacity. Its business model involves purchasing electrical power, running ASIC-based mining rigs to generate computing power ("hashrate"), and contributing that hashrate to third-party mining pools (primarily Foundry USA Pool and Luxor Technology Corporation) in exchange for block rewards and transaction fees in bitcoin. The company sources electricity through arrangements such as its power purchase agreement with Luminant ET Services Company LLC for the Odessa Facility, at an average cost of about 2.7 c/kWh through at least 2027, and seeks to sell back surplus power when not mining profitably.

Mining equipment has been purchased from vendors including Bitmain, Canaan, and SuperAcme, with recent agreements covering tens of thousands of additional miners for 2024 and 2025 expansion. Cipher holds, sells, or hedges mined bitcoin as part of its treasury management, storing bitcoin primarily in cold storage with custodians such as Coinbase Prime, Anchorage Digital Bank N.A., and Fidelity Digital Assets Services, and periodically selling bitcoin for operating expenses or capital needs. The company's customers are effectively the Bitcoin network and mining pools through which it earns block rewards and transaction fees, and its markets are centered on the U.S., particularly Texas, due to favorable energy costs, grid access, and regulatory environment.

Cipher's strategy focuses on cost leadership through low-cost, reliable power; scaling hashrate capacity through expansion of existing sites and new facilities like Black Pearl; and exploring strategic adjacencies such as bitcoin lending, asset management products, joint ventures, and mining-as-a-service offerings to complement its core bitcoin mining operations.