Bitcoin miner Gryphon cancels energy asset purchase in Canada; shares plunge

Quotes on Gryphon Digital Mining, a small-cap company that brands itself as a carbon-neutral bitcoin miner, plummeted more than 11% in premarket trading yesterday, March 4, after the company backed out of a deal to purchase energy assets from Canada’s Erikson National Energy. In recent months, Gryphon has been snapping up these assets to sell energy to AI and high-performance computing data centers.

Yesterday, Gryphon tumbled more than 11% to $0.24 per share in premarket trading before dropping over 16% during the day. However, it later bounced back to close almost flat versus the last close, at $0.27 per share. The stock has lost a third of its value since the start of the year and is off more than 86% over the last 12 months.

After the closing bell on Monday, the company revealed that it had terminated an agreement with Canada’s Erikson National Energy, announced less than two months ago. Gryphon had planned to acquire “hundreds of existing natural gas wells” for CAD2 million (about $1.39 million) to secure a cheap supply of electricity. However, during due diligence, Gryphon found that it needed only some of the Erikson assets, as it stated in late February. It later decided to scrap the deal entirely.

The acquisition of the Erikson assets was meant to be a first step in securing long-term competitive advantages in bitcoin mining and AI operations according to the press release. The company also said the deal would allow Gryphon to sell electricity to major tech companies, whose consumption is soaring due to AI and data centers.

Just a month later, Gryphon announced a new deal — the acquisition of a Captus Energy industrial site in Canada, which has access to natural gas, a grid connection, non-potable water resources, and dual high-speed fiber connection providers. Gryphon estimates that, at full capacity, this asset could generate over $5 billion in revenue.

“We speak to many investors who are still unaware that bitcoin miners now have significant exposure to AI,” wrote the research firm VanEck. “The synergy is simple: AI companies need energy, and bitcoin miners have it.”

According to MarketWatch, the lone analyst who covers Gryphon has a “hold” recommendation, with a target price of $16 per share, 59 times the closing price yesterday, March 4.