You’re reading The Mining Pod Newsletter: a weekly Bitcoin mining newsletter by Blockspace Media.

Today’s newsletter is on a Blockspace Media orginal scoop: Foundry, the largest Bitcoin miner by global hashrate, spinning out its self-mining arm into a new investible entity.

It’s about a 5 minute read.

DCG creates new company, Fortitude, from Foundry’s self-mining business

Foundry Digital’s parent company, Digital Currency Group (DCG), is splitting Foundry’s mining business into two separate entities, according to a private DCG shareholder letter shared with Blockspace and four sources close to the matter.

• The new entity, Fortitude Mining, consists of Foundry’s former self-mining operations and physical infrastructure.

• Foundry will retain its pool operations and other bitcoin mining service business lines.

DCG and Foundry intend to announce the news in the New Year, multiple sources told Blockspace. As noted in its shareholder letter, DCG plans to raise capital for Fortitude, but whether or not it intends to take Fortitude public – as over 20 North American mining companies have done since 2020 – remains to be seen.

• DCG’s Q3 shareholder letter forecasted Foundry’s self-mining business line to rake in $80 million in 2024.

• That puts Fortitude in the same league as public miners like Hive, Bit Digital, and Cipher Mining.

• The letter also states that Foundry’s total Q3 revenue was $35 million. 

Notably, DCG noted in its shareholder letter that it omitted Foundry’s pool luck – an industry term for variance in revenue caused by fluctuations in how many blocks a pool mines – from its financial summary.

“As such, the following discussion will not reflect the positive $10 million of revenue and EBITDA generated by pool luck in Q3 2024, negative $44 million in Q2 2024, positive $18 million in Q3 2023, negative $27 million YTD 2024, and positive $30 million YTD 2023,” the letter reads.

Sources said that Fortitude is actively hunting for a CEO, adding that Foundry Vice President Andrea Childs is taking the helm as the firm’s COO. The DCG shareholder letter states that Colyer will continue on as Foundry’s CEO. Foundry and DCG did not respond to Blockspace’s request for comment.

Read the full article by clicking here.

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