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BitFuFu SPAC merger could create most powerful crypto miner

By Robert Davis

22:18, 25 January 2022

Macro view of miner working for bitcoins mine pool
BitFuFu status will depend on its ability to increase hash rate - Photo: Shutterstock

A digital mining service backed by Bitmain – one of the largest bitcoin mining equipment manufacturers in the world – said on Monday it is planning to go public.

BitFuFu, a mining company based in Singapore, entered into a definitive agreement to merge with Arisz Acquisition (ARIZ), a blank cheque company based in New York. The move values BitFuFu at more than $1.5bn (£1.11bn).

“BitFuFu is the only cloud-mining strategic partner of Bitmain to date, and I look forward to further strengthening our business partnership with BitFuFu in the foreseeable future,” Clark Du, the president of Bitmain’s mining division, said in a statement.

About BitFuFu

BitFuFu was founded in 2020 with an initial investment by the hands of some founding team members of Bitmain.

Last year, the company made approximately $100m in revenue and expects this total to increase to nearly $330m in fiscal year 2022.

The company also plans to increase its hash rate – which measures how quickly a miner can complete a transaction – to a total of 10 exahash per second (EH/s) by the end of the year. If the company accomplishes this, it will make BitFuFu the most powerful mining company in the world.

“This milestone of becoming a publicly-traded company through our merger with ARIZ will further drive improvements to our corporate governance, increase transparency, and attract new talent to help us achieve our vision of becoming the top digital asset mining company,” said Leo Lu, BitFuFu’s founder and chief executive.

Transaction details

The transaction gave BitFuFu an enterprise value of $1.5bn, which is 4.6 times its forward projected revenue and 3.3 times its projected December annual recurring revenue of $465m.

It will also provide BitFuFu with more than $129m in cash at closing, after accounting for fees and taxes.


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BitFuFu is expected to use the funds to acquire more bitcoin mining machines.

The deal could close as early as the third quarter of this year and BitFuFu investors are expected to retain 100% of their equity share in the combined company.

“Entering this transaction now is the most optimal and strategic timing for enduring our rapid growth trajectory and increasing our global footprint in the crypto-mining industry,” Lu said. “We are the one-stop hash rate solution provider for miners of all sizes, providing a variety of innovative technologies, service solutions, and a global mining network to efficiently mine digital assets.”

Trouble for mining companies

Despite Lu’s optimism, BitFuFu is looking to enter the market at a particularly troubling time for cryptocurrency miners.

Stocks of companies like Hut8, Riot Blockchain, and Marathon Digital Holdings, are all trading considerably below their recent high-water marks achieved in November 2021.

At the same time, geopolitical strife across the globe has made mining operations unpredictable. For example, civil unrest in Kazakhstan caused the country’s leadership to shut off access to the internet, thereby halting a $1.5bn per year industry in the country.

Meanwhile, other countries like Russia and Pakistan have moved forward with plans to ban cryptocurrencies from their countries.

Read more: Can a Bitcoin Mining Council make crypto biodegradable?

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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