Bitcoin (BTC) miner Bitfarms (BITF) is buying rival Stronghold Digital (SDIG) for $175 million U.S. in stock as a wave of consolidation continues to sweep across the cryptocurrency sector.
Toronto-based Bitfarms is paying the equivalent of $6.02 U.S. per share for Stronghold Digital, which represents a premium of 105% to Stronghold's current share price of $2.93 U.S.
The deal is the latest consolidation among Bitcoin miners since a halving event occurred this April wherein the available supply of BTC that can be mined was reduced by 50%.
The reduction has pressured Bitcoin mining companies to cut costs and consolidate to achieve efficiencies of scale with the supply of the largest cryptocurrency significantly reduced.
Some analysts have said that Bitcoin miners are now in a battle for survival following the halving event.
Some mining companies have pivoted to processing artificial intelligence (A.I.) applications in recent months.
For its part, Bitfarms said that it is acquiring Stronghold Digital so that it can diversify beyond simply mining for Bitcoin tokens.
The move by Bitfarms also comes as it fends off a takeover approach by another mining company, Riot Platforms (RIOT), which has taken a 19% stake in Bitfarms.
In May of this year, Stronghold Digital announced that it was exploring “strategic alternatives” that could include the sale of the company.
Bitfarms stock has declined 15% so far this year and currently trades at $3.20 per share.
The stock of Stronghold Digital has fallen 56% year-to-date and is trading at $2.93 U.S. a share.
