Bitfarms has announced a merger agreement to acquire Stronghold Digital Mining, valued at approximately $175 million, which includes $125 million in equity and $50 million in assumed debt.

The acquisition, aimed at enhancing Bitfarms' mining capacity and power access, is expected to close in the first quarter of 2025.

This strategic move follows three years of negotiations between the two companies, as noted by Bitfarms CEO Ben Gagnon.

The deal will allow Bitfarms to add up to 307 megawatts of power capacity, increasing its total energy portfolio to over 950 megawatts by the end of 2025.

Bitfarms reported revenue of $41.5 million in Q2 2024, and the merger is anticipated to enhance its mining capacity by providing additional access to power.

Stronghold Digital Mining's executives had previously indicated interest in selling the company due to its undervalued stock price, particularly after a significant Bitcoin halving event.

Following the announcement of the acquisition, Stronghold's stock price surged by approximately 69%, while Bitfarms shares experienced an 8% decline.

This acquisition comes at a critical time as cryptocurrency miners face tighter profit margins and increased costs after the Bitcoin halving in April 2024.

The enhanced operational capacity from this merger is expected to strengthen Bitfarms' market position and shareholder value.

Gagnon emphasized the importance of vertically integrating power generation and expanding energy trading capabilities to enhance long-term shareholder value.

The acquisition highlights the ongoing trend of consolidation within the cryptocurrency mining sector as companies adapt to a rapidly changing landscape.

CEO Rob Chang of Gryphon Digital Mining noted that this acquisition is part of a larger strategy to secure over 500 MW of low-cost power generation opportunities.