BitFuFu Buys Hashrate With BTC; New Coins Go to Customers

BitFuFu reported in an unaudited Sept. 3 operating update that it spent millions of Bitcoin to acquire hashrate capacity and that most of August’s production increase was credited to cloud-mining customers rather than added to the corporate treasury.

Total production in August was 174 BTC, up from 112 BTC in July. Cloud-mining output rose to 86 BTC from 40 BTC, contributing 46 BTC of the 62 BTC month-over-month increase. Self-mining output increased to 88 BTC from 72 BTC, adding 16 BTC.

The company defines cloud-mining as hashrate sold to customers who receive the Bitcoin produced by that capacity. Coins produced by cloud-mining capacity are excluded from BitFuFu’s holdings and recorded as customer revenue rather than corporate treasury assets.

BitFuFu’s reported Bitcoin holdings rose by 59 BTC to 1,373 BTC at the end of August, up from 1,314 BTC in July. Both month-end balances include 44 BTC pledged for loans and miner procurement payables. The August reserve remained 298 BTC below the 1,671 BTC balance reported for June.

In its July disclosure, the company attributed a 357 BTC net decline to advance payments made in Bitcoin for hashrate capacity scheduled to start in August and run for 330 days. BitFuFu has not disclosed the contract price for that capacity or whether any open-market Bitcoin sales funded the purchases.

Managed hashrate reached 20.6 exahashes per second (EH/s) at Aug. 31, up from 14.2 EH/s at the end of July. The company said capacity secured in June and July had come online. In an Aug. 17 earnings release, CEO Leo Lu noted that managed hashrate had “returned to approximately 20 EH/s by mid-August.”

The operating update does not include incremental profit or payback figures for the capacity funded with Bitcoin. Company disclosures separate operating metrics such as production totals and managed hashrate from contract economics and financial results, and the update does not publish measures of how quickly Bitcoin used to secure new capacity will be recovered through future production or revenue.

Cloud-mining customers accounted for the bulk of August’s production gain and supported a separately reported revenue stream, while self-mining contributed 88 BTC to the month’s output. The reported rise in holdings reflects a mix of self-mined coins, advance payments and pledged balances rather than the full monthly production total. The company has not published contract pricing, revenue attribution or a payback timeline for the capacity purchased with Bitcoin.