The Bitcoin mining industry has had a dramatic week as companies pivot to high performance computing, American Bitcoin prepares for its public debut, and technical challenges remind us of the complexities underlying pool operations.
With hash rate approaching the mythical zettahash milestone and miners increasingly diversifying their business models, the landscape is changing rapidly.
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On the latest Mining Pod news roundup, Colin Harper, Charlie Spears, and Matt Kimmell discuss the latest developments in the mining industry and unpacked their implications.
Below is an edited transcript of the conversation.
Colin: Welcome back to The Mining Pod. Let’s start with the difficulty update. Matt, what’s happening in the mempool?
Matt: The mempool is dry as can be – there’s nothing to talk about on the fee front. But looking more broadly at difficulty, we had a very small increase last time around. We’re now 44% through this adjustment period and looking at a pretty steep rise – we’re set to go up 4.98% according to Hash Rate Index.
Bitcoin price is down from all-time highs a couple weeks ago when we touched $124,000. We’re down about 10% to $112,000. Hash price touched $60 on that all-time high day but went down to about $53. Now we’re back up closer to $55, but we’re set to have a difficulty increase of about 5% in about a week’s time.
Charlie: We’re just on the cusp of a zettahash. It’s going to happen here in the next few months – you can feel it. My subjective observation is that it’s cooler here in the central US than before. A lot of the hash rate is concentrated in Texas and Georgia, and it’s cooled off. If you had some minor curtailment during the day due to weather, I’d expect that curtailment to decline for the time being.
By which moving average do we say we’ve officially hit a zettahash? Are we looking at the seven-day or 30-day?
Matt: I would say seven-day, but the 30-day is when it’s been solidified. I actually advocate for the 14-day moving average because it theoretically tracks the difficulty adjustment period. Anything less than seven days I think is unserious.So we need a full difficulty adjustment where the average moving average of that difficulty adjustment indicates a zettahash. That’s the official metric we will celebrate on this show.
Colin: Let’s move to our first story – Griffin and Hut 8 surge after Reuters reports American Bitcoin could be trading in September. This seems like the biggest news today.
The article says it’s possible that American Bitcoin could be trading on public markets via its merger with Griffin Digital Mining as soon as September. The unlisted firm’s merger is said to be finalized shortly, and the goal is to start trading in early September according to Asher, the new CEO of Hut 8. That’s not a guarantee – could be later – but it’s looking like they have most of what they need. They’ve also broken ground on 1.5 gigawatts of expansion and are taking out a $303 million credit facility. They’ve got data center projects across Louisiana, Texas, and Illinois. Their stock has been surging.
When this news first broke, I was pondering what’s the real benefit of splitting off all these mining assets, taking an 80% stake in this new company when they used to own 100% of those assets. Now it’s making a lot of sense. If you can get excitement behind two stocks and have the business lines clearly delineated, it seems to be paying off. Hut 8 is chugging away on the infrastructure and data center side of things.
Matt: The benefit for American Bitcoin is that because of the merger, they get to sidestep the IPO process with the SEC, which can be a bit of a gauntlet. And the names involved – the Trump brothers, Winklevoss twins – it’s very 2025. They’re resurrecting these old zombie companies through reverse mergers and SPACs. This has the chance to be the meme asset that the Trump family maybe wanted their Solana token to be, just in the equity space.
We’re in IPO season again. The Circle one got a lot of people back engaged. This is the first real scaled mining IPO. The Avengers of American politics are getting together to put their names on this.
Colin: Alright, on to our next story on last week’s crypto ETP flows. Matt,what’s happening in the crypto ETP market?
Matt: The largest outflow from global exchange-traded products since March – $1.4 billion out. There was a bad jobs report and bad PPI inflation report, so everyone thought the Fed was going to keep interest rates where they were or maybe even hike. That hurt risk-on markets, particularly crypto.
Bitcoin has become an interest rate sensitive asset on short-term timeframes. We had Jackson Hole last week, which is kind of the Super Bowl of central banks. Powell came out and said it’s all about unemployment now – we care less about inflation – and signaled maybe we need to change our tune. Markets quickly reversed.
On a weekly scale, it’s the first time ever that ETH has been more of a preference. Month to date, ETH was positive $2.5 billion in versus Bitcoin’s $1 billion out. That’s a stark contrast given the market cap sizing differences. ETH has caught the narrative. You’ve got to hand it to Tom Lee, who’s been able to capture the Ethereum narrative.
Colin: Ok, let’s talk about IREN doubling its GPU fleet to 8,500 units.
IREN has secured $102 million in financing to pay back prior units it purchased. They now have 8,500 NVIDIA GPUs after purchasing 4,200 recently – some Blackwells, H200s, and H100s. This 4,200 Blackwell purchase cost them $193 million.
Interestingly, IREN, unlike other Bitcoin miners like Hut 8 or Core Scientific, they’re not doing the power shell model. They’re not just building massive facilities and trying to find a tenant to park GPUs. They’re actually going to rent out the compute themselves and operate in their own facilities. They recently joined NVIDIA’s marketplace as a cloud partner.
The market seems to like IREN’s strategy. The stock price has been absolutely ripping – up 43% over the last month and 188% over the last six months from the April lows.
It’s interesting to juxtapose this with Hut 8 – the power shell versus the neo-cloud model. We’re starting to see separation in strategies with these Bitcoin miners.
Charlie: Are there going to be any pure miners left by the end of the year? You’ve got to wonder. With CleanSpark, now that Zach’s out, they mentioned in some public statements they might look at it.
Matt: I think part of the second-order effect is higher hash rate concentration among the biggest public miners that are sticking to their old strategies. This story with IREN is interesting because they’re running a different type of strategy – buying and operating the GPUs themselves rather than just leasing space and power.
One of the hardest nuts to crack for a Bitcoin miner doing an AI strategy like IREN’s is actually finding a way to have sales pipelines for that compute. Miners don’t sell things – they buy things and run those things. They’re not typically salesmen. When you actually have to make sure you have an end buyer for what you’re deploying, that’s a pretty big operational hurdle.
Colin: Finally, let’s talk about Ocean Pool’s technical glitch. Charlie, what happened?
Charlie: Ocean dropped a tweet saying a huge miner switch to Ocean triggered a bug and its associated failsafe. No work was lost, but stats were impacted and payouts may be temporarily delayed.
Sometime overnight, Ocean’s dashboard flashed that it was estimating 300 exahash of hash rate pointed to itself. As the official account says, this was downstream of an interesting edge case when a large miner joined the pool.
This is a nice opportunity to talk about how when we discuss network hash rate, we’re really just talking about an estimation. Pools look at valid shares submitted by miners, which are shares of work above a certain difficulty. A pool can’t necessarily know exactly how much hash rate is pointed to it.
When you have giant variances and shifts in this, it can sometimes throw off software. Congrats to Ocean – it looks like they added maybe 4 to 5 EH/s more. They’re growing from launching at 500 petahash to now 15 EH/s. They’re still a minor part of the overall network hash rate, but this kind of idiosyncrasy of operating a pool made its rounds on social media.Charlie: Ocean uses the Datum protocol, which is similar to Stratum V2 in what it does. You need to run a Datum server between the mining farm and the pool, and it allows more direct participation in template construction. I imagine this particular weird idiosyncrasy with the hash rate spike had something to do with an edge case in Datum – probably a large miner coming online running a Datum server, and something about how Datum handles shares submitted.
Header image by İsmail Enes Ayhan via Unsplash.
