DCG Spins Off Fortitude Mining, Betting on Institutional Crypto Exposure

Digital Currency Group (DCG), a capital markets company, has spun out a new cryptocurrency mining subsidiary, Fortitude Mining. This move signals DCG's intent to provide institutional exposure to a diversified pool of mined crypto assets. The spinout was announced on the X social media platform on Jan. 29.

Previously, the mining operation was part of Foundry, a decentralized mining and staking service. Andrea Childs, who joined Foundry in 2020, has been appointed as the CEO of Fortitude Mining. The financial details of the acquisition were not disclosed.

The spinout of Fortitude Mining may have been part of Foundry's broader restructuring plan. In December, the company laid off 16% of its US workforce to focus on its core Bitcoin (BTC) mining operations. Foundry currently operates the largest Bitcoin mining pool, accounting for more than 30% of the network's hashrate.

The Bitcoin mining industry has faced renewed challenges following the network's fourth halving event in April 2024. Galaxy Digital calculated $460 million in reverse mergers and acquisitions in the first six months of 2024, forecasting further industry consolidation in the year ahead as the economics of mining continues to squeeze smaller players.

Architect Partners also identified an M&A surge among Bitcoin miners as large companies sought to boost data center capacity and access cheaper energy resources. Publicly traded miners have also diversified their business post-halving, with companies such as MARA Holdings, Riot Platforms, and Hut 8 choosing to build up a bigger Bitcoin stockpile.

According to a Jan. 7 report by Digital Mining Solutions and BitcoinMiningStock.io, a notable shift emerged among Bitcoin miners in 2024, with many opting to retain a larger portion of their mined Bitcoin or refraining from selling altogether. The report also noted that four of the 16 largest Bitcoin holders are miners.