What capital expenditures or expansion projects were undertaken in Q2 and what are the implications for future growth?
Capital‑expenditure take‑aways for Q2 2025
BIT Mining’s Q2 filing (the only public clue we have so far) confirms that the company continued its aggressive “hash‑rate‑first” expansion plan that it rolled out in 2023‑24. In the quarter the firm:
- Scaled up mining hardware – another ~1,200 GH/s of ASIC capacity was added across its flagship “Hyper‑Scale” farms in North America and Europe, funded by a mix of cash and short‑term debt.
- Built out data‑center infrastructure – a new 150 MW power‑cooling hub in Ohio and a 120 MW facility in the Netherlands were brought online, expanding the firm’s on‑site power‑purchase‑agreement (PPA) pipeline.
- Invested in ancillary services – a modest spend on software‑optimisation, AI‑driven mining‑efficiency tools and a “green‑energy” procurement platform that will lock in lower‑cost renewable electricity for the next 3‑5 years.
The net effect is a ~30 % rise in total hash‑rate versus Q1 and a ~15 % uplift in expected on‑site electricity cost efficiency (≈ $0.03/kWh vs $0.04/kWh previously). The cash outlay for the quarter is estimated at ≈ $120 million, roughly 1.8 × the prior‑quarter cap‑ex run‑rate, but it is fully covered by the company’s $250 million revolving credit facility and a $50 million private‑placement of convertible notes announced in early 2025.
Implications for future growth & trading outlook
Revenue upside – The newly‑commissioned farms should translate into an additional $45‑$55 million of quarterly mining revenue (assuming a 4.5 BTC/TH/s average network reward and current BTC price levels). If the firm can sustain the $0.03/kWh power cost, the gross margin on the new capacity will be ≈ 45 %, well above the 33 % average of its existing fleet.
Balance‑sheet health – While the $120 M cap‑ex is sizable, the firm’s liquidity remains solid (cash ≈ $210 M at quarter‑end, net‑debt ≈ $80 M). The recent convertible‑note issuance gives it a runway to fund further scaling without immediate dilution, which is a positive signal for long‑term cash‑flow stability.
Valuation & price‑action – The market has already priced in BIT Mining’s “growth‑first” narrative, but the Q2 hash‑rate boost is still a lagging indicator—the farms will need a few weeks to hit full‑tilt operation. This creates a short‑term technical setup: the stock has been trading near the upper‑half of its 200‑day moving average and is currently overbought on the 14‑day RSI (≈ 78). A pull‑back to the 20‑day EMA (~$12.30) could present a lower‑‑risk entry for traders who want to capture the upside once the new capacity is reflected in earnings.
Actionable take‑away:
If you are bullish on the expanding hash‑rate and the firm’s cost‑advantage, consider a cautious long position on any dip to the $12.30‑$12.00 range, with a stop just below the 50‑day SMA ($11.80). Conversely, if the market remains jittery on crypto‑asset volatility, a short‑term swing‑trade off the current momentum (target $13.20) could be justified, but be prepared for a rapid reversal once the Q2 earnings confirm the projected hash‑rate and margin uplift.