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“Given our belief that upcoming market conditions may require a flexibility premium, we have decided to continue with contracts with Bitmain and MicroBT, but not with Bitfury in 2022,” Page said.
The miner’s predicted hashrate will drop, but the company will be “nimble and potentially able to take advantage of opportunities in a rapidly changing market,” he added.
With volatile market conditions and a changing global landscape, spending discipline is vital, he said.
In the future, the company may purchase Bitfury machines. The contract with Bitfury is “seven years long and very convenient given that we have the right of first refusal” and also guarantees favorable prices. If rigs are in high demand or hard to come by, Cipher Mining could exercise its right to buy rigs from Bitfury at a bargain price, Page said.
If market conditions are such that the miner can buy rigs at “attractive prices” later this year, he expects to be able to increase the hashrate by another 1.9 EH/s by next year.
Due to the decision to abandon Bitfury installations, the price per terahash for Cipher Mining has increased by 10%-11%, a Wells Fargo analyst said during a telephone conversation. According to the presentation, Cipher will pay $42.81 per terahash per second.
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