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Bitcoin miners seek alternative energy sources to cut costs

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During the 2021 bull market, many large mining companies took on massive loans to buy equipment and the proper infrastructure required to mine cryptocurrency. Yet the collapse of crypto exchange FTX and Celsius left many of these companies filing for bankruptcy. 

The current bear market, coupled with high Bitcoin network hash rates and low profits, has yet again left the crypto industry wondering if miners will be able to recover from losses. While this remains questionable, it’s become evident that mining companies today are focusing more on alternative energy resources to cut costs, ensure profits and, in some cases, reduce their environmental impact.

Alternative energy sources used by miners

Steven Lubka, managing director for Bitcoin-focused financial services company Swan Bitcoin, told Cointelegraph that while the average rate to mine a single Bitcoin (BTC) is around $26,000, mining companies focused on renewable energy sources are seeing rates between $5,000 and $15,000 per BTC.

A spokesperson for Riot Blockchain, a United States-based publicly traded Bitcoin mining company, told Cointelegraph that wind and solar energy generated across Texas has helped Riot ensure some of the lowest costs to mine crypto. “As stated in our Q2 investor deck, it costs Riot $8,389 to mine 1 Bitcoin,” he said.

Aerial view of Riot Blockchain’s Rockdale mining site. Source: Riot Blockchain

Kent Halliburton, president and chief operating officer of Sazmining — a hosted Bitcoin mining provider — told Cointelegraph that the biggest expense for mining has always been electricity:

“Bitcoin miners are naturally incentivized to find the lowest-cost power. Excess electricity is the lowest priced. With renewables, there is often excess electricity, which makes it a perfect fit for Bitcoin mining.”

Halliburton added that independently sourced data from the Bitcoin Mining Council shows that the Bitcoin network may indeed be one of the most sustainable industries. According to the source, 59% of mining operations are carbon-free and growing at a rate of nearly 4.5% per year.

“All of our mining operations in Wisconsin and Paraguay are utilizing excess hydroelectricity,” he said.

The shift to alternative energy sources seems to be a trend for miners thinking about long-term success. Phil Harvey, CEO of crypto mining infrastructure provider Sabre56, told Cointelegraph that the company is currently working with dozens of mining companies to get machines set up across Sabre56’s three facilities located in Wyoming and Ohio.

Saber56’s Bonepile site in Gillette, Wyoming. Source: Rachel Wolfson

Harvey explained that Sabre56’s facility in Gillette, Wyoming — known as “Bonepile” — hosts nearly 2,200 mining machines that are powered by a combination of energy sources, including a material contribution from renewable energy. The 5,200-square-foot site draws on Basin Electric’s mixed energy portfolio. According to Basin Electric’s website, this includes 24% wind, 0.6% recovered energy and 4.3% hydro, which adds up to 28.9% renewables. 

Harvey said, “The machines at our Bonepile site consist of a mixture of MicroBT Whatsminer M50s and Bitmain Antminer S19s. In terms of the site design and methodology, we leverage a forced-air design, meaning air is forced into the facility to cool the machines.”

According to Harvey, the Bonepile facility is designed to ensure surplus air provision. Harvey explained that this method reduces overheating and strain on the mining equipment while also allowing the miners to naturally exhaust hot air through overpressure.

“This is different from the standard design widespread in the mining industry, which is often extracting the hot air with an additional mechanism while not having a system in place to aid air into the facility,” he remarked.

OceanBit, a company developing renewable energy platforms using ocean thermal sources, is taking a different approach. Michael Bennett, co-founder of OceanBit, told Cointelegraph that the company is integrating Bitcoin mining into its ocean thermal energy power plant design. “This will allow us to balance variable loads, deliver power faster to offshore operations, and monetize excess energy to improve plant profitability,” he explained.

According to Bennett, ocean thermal energy is the largest untapped energy source on the planet. “It’s a base load source of renewable energy, like hydro or geothermal, but uses the temperature difference in ocean water to generate electricity.”

Bennett believes Bitcoin is the missing piece needed to scale the energy source to global adoption since it solves a number of ocean thermal energy conversion (OTEC) commercial challenges.

Diagram of OceanBit’s thermodynamic cycle. Source: OceanBit

Nathaniel Harmon, co-founder and CEO of OceanBit, elaborated, “The byproduct of OTEC generation process is four degrees Celsius cold water, which makes it ideal for cooling ASICs, while the byproduct of ASICs is low grade heat, which makes it ideal to use in the OTEC process. The combination increases the efficiency while decreasing the cost of both.” 

Bennett shared that OceanBit plans to unveil its R&D power plant in Hawaii in 2024.

Some alternative energy sources are controversial

Pennsylvanian crypto mining company Stronghold Digital Mining is using coal refuse to power its mining operations. 

This refuse — also known as gob, culm or boney — is the result of the refining process of coal mining. These unrefined bits of coal mixed with shale, slate or other impurities are piled on thousands of acres of abandoned mine lands in Pennsylvania.

Greg Beard, CEO of Stronghold Digital Mining, told Cointelegraph that his firm is working with the Pennsylvania Department of Environmental Protection and local environmental authorities to clean up piles of waste coal and use them to power Bitcoin mining operations.

He said, “Acid mine drainage from these piles is one of the largest sources of water pollution in Pennsylvania. The waste piles have also been catching fire for decades by way of spontaneous combustion, releasing toxic pollution into the air. Stronghold converts the coal refuse into power by way of specialized facilities and then either supplies the power to the local grid or uses the power to mine Bitcoin.”

“Bitcoin mining is required to continue the waste coal cleanup activities, making it a much more efficient operation than miners seeking out power sources,” added Beard.

While this does provide a method of cleaning up the tons of coal refuse, from an environmental perspective, it also poses something of a Catch 22.

The special plants that can use refuse coal are still burning hydrocarbons. The Pennsylvania arm of the Energy Justice Network project has even contended that refuse coal-firing plants pollute more than new coal plants.

Stronghold itself further came under the scrutiny of environmental groups when it applied for a permit to burn tire-derived fuel at its Panther Creek plant. 

Clean Air Council activist Russell Zerbo recently said on a podcast that the plant “uses the electricity it produces to generate cryptocurrency; rather than selling that electricity to the energy grid, the plant should be completely repermitted as a solid waste incinerator that would be subject to increased air pollution monitoring requirements.”

Challenges for miners may hamper adoption 

While it’s notable that crypto mining companies are using alternative energy sources, certain challenges could hamper adoption. Halliburton claimed that misinformation regarding alternative energy sources is common:

“Local populaces may throw-up roadblocks because they don’t realize that Bitcoin miners are providing a net benefit to their local communities through job creation and monetizing wasted or excess electricity. Electricity is also misunderstood; it’s extremely expensive to store, and if electricity is not utilized or stored when it’s generated, it gets wasted — quite literally put into the earth.”

Moreover, the challenges that come along with using renewable energy are also evident. Harvey mentioned that the altitude of Gillette, Wyoming results in much thinner air quality. As such, the machines at Sabre56’s Bonepile facility can struggle with pulling in enough air required for cooling.

Then comes the challenge of thermal pollution, as hot air is released into the atmosphere from the mining machines, which Cointelegraph witnessed firsthand at the Bonepile site in Wyoming. Given this, some mining companies are finding unique ways to reuse heat production. For instance, Genesis Digital Assets uses hot air produced by mining equipment to grow vegetables in the Nordic regions.

Heat from mining machines is used to grow plants inside a greenhouse. Source: Genesis Digital Assets

All things considered, the future of mining operations will likely rely on renewable sources. Margie Feng, head of marketing at Bitmain — a leading producer of crypto mining equipment — told Cointelegraph that the company has shifted gears and is currently working hard on promoting hydro-cooling technologies, as she believes that demands for this type of equipment will only grow in the future. 

Feng added that Bitmain has found that almost a quarter of all Bitcoin miners use water to power their setups, while wind and nuclear are the second- and third-biggest contributions, respectively.

Cryptocurrency

Bitcoin Price Analysis: Is BTC Out of the Woods After 8% Correction?

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Bitcoin has faced notable selling pressure at the $111K range, leading to a bearish rejection. Nevertheless, the price lacks sufficient bullish momentum and a deeper correction seems plausible in the mid-term.

Technical Analysis

The Daily Chart

Following its breakout above the previous all-time high at $109K and printing a new peak at $111K, Bitcoin met strong resistance that has sparked notable selling pressure. The failure to sustain momentum above this key psychological level has resulted in a bearish rejection, pushing the asset back below the $109K threshold.

This price action coincided with the sweep of buy-side liquidity resting above the previous swing high, allowing smart money to execute sell orders efficiently. As a result, the market has entered a corrective phase, now approaching the daily fair value gap (FVG) between $97K and $100K. This zone likely holds substantial demand, potentially acting as a support zone that could trigger a bullish reaction.

Should the price stabilize within this FVG, a rebound toward the $111K resistance becomes likely. Conversely, failure to hold this level could pave the way for further downside, with the next key support residing near the $95K region.

The 4-Hour Chart

On the 4-hour timeframe, intensified selling pressure at the $111K resistance has caused BTC to break below its previously maintained ascending price channel. The subsequent pullback toward the broken channel boundary near $108K has confirmed the bearish breakout and suggests weakening momentum.

Currently, the price is consolidating within a critical support-resistance band spanning from $100K to $108K. As long as Bitcoin remains within this range, short-term volatility is expected. However, a decisive breakout, either above $108K or below $100K, will likely set the tone for the next significant move, with either a bullish recovery or an extended correction unfolding based on the breakout direction.

On-chain Analysis

The Realized Price of mid-term holders has consistently functioned as a pivotal support or resistance zone, making it a valuable indicator for gauging broader market sentiment. This metric, representing the average on-chain acquisition cost of UTXOs held by long-term investors, often aligns with key turning points in Bitcoin’s price cycle.

Currently, Bitcoin remains positioned above the Realized Price of the 3–6 month holder cohort, a signal that this group remains in profit and has not faced significant stress. However, recent selling pressure and a rejection from the $111K level have dragged the price closer to the Realized Price of the 3–6 month holder range, which resides around the $98K zone.

This places the $98K–$100K area in the spotlight as a crucial support region. A firm reaction from this zone would confirm continued confidence from mid-term holders and may act as the launchpad for a renewed bullish leg, potentially propelling Bitcoin to fresh all-time highs. Failure to hold this support, however, could shift market sentiment and open the door to deeper corrections.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.

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Cryptocurrency

$200M Crypto Scam: OFAC Sanctions Funnull as Experts Find Ties to Huione Pay, Triad Nexus

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The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Funnull Technology Inc., a technology firm headquartered in the Philippines, and its administrator, Liu Lizhi.

The company has been implicated in running a “pig butchering” scam.

$200M Scam Uncovered

According to the official press release, Funnull has stolen over $200 million from American investors. OFAC has also placed two of Funnull’s cryptocurrency addresses on its Specially Designated Nationals (SDN) List to restrict their access to financial systems.

In response, the FBI’s Internet Crime Complaint Center (IC3) issued a public advisory, outlining key technical indicators, such as infrastructure components and IP addresses tied to Funnull’s scam operations.

Deputy Secretary of the Treasury Michael Faulkender, in an official statement, said

“Today’s action underscores our focus on disrupting the criminal enterprises, like Funnull, that enable these cyber scams and deprive Americans of their hard-earned savings. The United States is strongly committed to ensuring the continued growth of a legitimate, safe, and secure digital asset ecosystem, including the use of virtual currencies and similar technologies.”

Connection to Triad Nexus and Huione Pay

According to the findings by blockchain intelligence Chainalysis, Funnull Technology Inc. enabled cybercriminals by purchasing IP addresses in bulk from major cloud service providers and selling them to operators of fraudulent investment platforms. This infrastructure allowed scammers to host malicious websites that mimicked legitimate investment platforms, thereby deceiving victims into investing in non-existent opportunities.

Funnull was a central player in a network dubbed by security researchers as “Triad Nexus,” which includes more than 200,000 unique hostnames, many of which are associated with investment scams, fake trading apps, and suspect gambling networks. OFAC identified two crypto addresses linked to Funnull Technology Inc., used for receiving cybercriminal payments.

These addresses are tied to scam-related infrastructure and show connections to Huione Pay, which was recently flagged by FinCEN as a major money laundering concern.

Further investigation by blockchain security firm Elliptic revealed that the two addresses in question received more than $4 million in total.

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Cryptocurrency

Bitcoin to $150K or Back to $92K? Traders Divided as Market Cools Off

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Bitcoin (BTC) smashed a fresh all-time high (ATH) of $111,814 on May 22, but the party may be over, at least for now.

After rallying by more than $15,000 over the month, the king crypto has shed $9,000 in the last week alone, slipping to the $103,000 level, putting traders on edge and sparking new debate: Is this a healthy cooldown or the start of a deeper plunge?

Technical Red Flags Flashing

Volatility is back with a vengeance. In the last 24 hours, BTC has swung between $103,300 and $105,000, reflecting growing market uncertainty. Zooming out, it’s still up 9.1% in the last 30 days and 52.1% over the past year, but the momentum seems to be fading.

According to data shared by analyst Axel Adler Jr., Bitcoin just triggered four consecutive sell signals on CryptoQuant’s Net UTXO Supply ratio. “This is a typical pattern for an overheated market phase, where profit-taking occurs and demand begins to lag supply,” he warned, highlighting the red flag that often comes before short-term tops.

Further, the market watcher pointed to two possible scenarios for the asset: a sideways purgatory, with BTC drifting sideways between $95,000 and $105,000 for weeks, or a mid pullback that could see it plunge toward $92,000 in a bid to “relieve overbought conditions.”

Betting Big on Bitcoin

However, others are more optimistic, or delusional, depending on who you ask. According to BetIdeas in an email to CryptoPotato, there’s an 80% chance of BTC hitting $120,000 in 2025, and a 40% shot at $150,000.

“The volatile nature of crypto is what will always grab the headlines but with the upwards trend in May with Bitcoin being increasingly positive, it looks as though a big run for Bitcoin holders is coming,” wrote spokesman Steve McQuillan.

He stated that traders on the platform had placed a 22% chance on a run toward $200,000 before the end of the year.

Meanwhile, popular analyst Daan Crypto Trades has pointed to the zone between $97,000 and $99,000 as a key level to watch for a potential bounce, citing Fibonacci retracement levels and the 200-day moving average.

Elsewhere, Michaël van de Poppe doesn’t seem too fazed by the current goings on in the market, terming it “consolidation and correction,” which, in his opinion, is “very healthy and normal.”

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