In a significant move during the third quarter, Keel Infrastructure completely divested its Bitcoin holdings, selling 2,520 Bitcoins for an impressive $192 million. As of September 30, the company, which previously operated as BitFarms, is now left with only minimal Bitcoin holdings, according to recent disclosures from a former miner.
The sale encompassed the 2,261 Bitcoins the company owned and an additional 259 Bitcoins it mined at the start of the quarter. Keel noted that the timing of these sales was fortuitous. Looking forward, daily sales of Bitcoins generated from Keel’s remaining operations in Quebec will further “effectively eliminate the exposure of our government debt holdings to Bitcoin price fluctuations.”
Transitioning Business Models
Keel Infrastructure has undergone a substantial transformation after rebranding from BitFarms. The company, which relocated to Delaware in April, is positioning itself as a North American digital infrastructure and energy entity, moving away from its original focus on Bitcoin mining.
Financially, the shift has had noticeable impacts. The company’s revenue from continuing operations dropped to $28 million in the latest reporting period, a decline from $68 million the previous year. This downturn is attributed to the suspension of U.S. Bitcoin mining in the second quarter and a decrease in Bitcoin’s market price. Additionally, adjusted EBITDA plummeted from a positive $19 million to a deficit of $27 million, while general and administrative costs nearly doubled to $34 million due to increased hiring and elevated stock-based compensation. As of November 4, Keel reported roughly $780 million in unrestricted cash, indicating no immediate need for debt or equity financing prior to entering a lease agreement.
CEO Ben Gagnon emphasized ongoing demand amidst growing power supply constraints, stating that “Keel’s 2027 and 2028 power is more advanced, safer and closer to reality than last quarter.” CFO Jonathan Mear remarked on the transition of pre-lease capital into project financing and the company’s commitment to exploring capital recycling opportunities.
Future Developments and Construction Projects
In September, Keel commenced construction at Moses Lake, marking it as the first site expected to generate high-performance computing (HPC) revenue by 2027. Plans are in the works for next-generation infrastructure at this location, while the company anticipates significant data center capacity growth from 478 megawatts (MW) to nearly 1.9 gigawatts (GW) as progress continues at Sharon Creek and Panther Creek in Pennsylvania.
Keel’s development pipeline currently stands at approximately 2.2 GW, with pre-existing grid connections in place across Pennsylvania, Washington, and Quebec. This capacity will be instrumental as the company looks to lease properties before the funds from its Bitcoin sales and remaining mining activities in Quebec are fully utilized.
Keel is not alone in its strategic pivot; other companies such as Riot Platforms and Hut8 have also sold significant quantities of Bitcoin this year to finance AI and infrastructure advancements. For instance, Riot recently announced a lease agreement with Anthropic for a Texas site valued at approximately $28 billion, demonstrating a burgeoning trend where public miners are reorienting their operations towards AI capabilities rather than solely accumulating Bitcoin.
Keel’s remaining mining operations are located in Quebec, where regulated electricity rates favor production. Going forward, the company plans to sell mined Bitcoins on the day of extraction, opting to convert hash rate into cash for infrastructure development rather than maintaining a volatile treasury associated with Bitcoin’s price variations.
As Keel pursues its new alignment with AI and digital infrastructure, it remains to be seen if upcoming lease agreements will materialize in the terms projected by Gagnon, particularly given the competitive conditions present in the targeted locations. The recent $192 million Bitcoin sale serves as a pivotal indicator of an apparent departure from their previous financial strategies.
