Soluna and Galaxy Digital Expand Bitcoin Mining Partnership

Soluna Holdings is expanding its partnership with Galaxy Digital to scale bitcoin mining. Galaxy will relocate its operations to a 48 MW expansion at Project Kati 1 in Texas, bringing the site to its full 83 MW capacity. The deal is Soluna's largest single-partner deployment to date and is expected to be operational in Q1 2026. Soluna's operating capacity will increase to 206 MW when fully deployed.

Soluna Holdings (SLNH) has announced an expansion of its partnership with Galaxy Digital (GLXY), involving the deployment of a 48 MW bitcoin mining operation at Project Kati 1 in Texas. This strategic move will bring the site to its full 83 MW capacity, marking Soluna's largest single-partner deployment to date. The project is expected to be operational by the first quarter of 2026, with plans to further expand to 206 MW by the same period.

Under the new agreement, Galaxy Digital will relocate its existing mining equipment from the Helios datacenter campus in the Texas panhandle to Project Kati 1. This relocation aligns with both companies' commitment to sustainable energy use. The deployment underscores Soluna's ability to attract and retain major industry players, positioning it as a leader in the energy-crypto sector.

The partnership highlights the growing industry demand for efficient, sustainable energy solutions. By securing Galaxy as an early partner at Project Kati 1, Soluna is validating its approach to deploying high-capacity infrastructure in strategic locations. This could serve as a replicable model for future collaborations and potentially accelerate the adoption of clean energy in blockchain operations.

Soluna's modular design and MaestroOS software optimize real-time power consumption, enhancing energy efficiency and generating ancillary revenue streams. The scalability of Project Kati 1 is particularly noteworthy, with plans to expand to 166 MW, aligning with the surging demand for Bitcoin hosting and AI compute.

The financial terms of the partnership underscore Soluna's credibility. The $5 million loan facility, secured by Project Sophie's assets and structured with limited recourse to Soluna's parent company, exemplifies the strength of project-level standalone cash flows. Additionally, Spring Lane Capital's $20 million investment in Project Kati 1 highlights the growing institutional demand for renewable-powered computing infrastructure.

The partnership positions Soluna as a leader in the renewable computing sector, offering investors a high-conviction opportunity. However, risks remain, including regulatory shifts, grid constraints, and the pace of AI adoption. Soluna's proactive approach to ERCOT planning, diversified project pipeline, and alignment with institutional capital mitigate these risks.

For investors with a 3-5 year horizon, Soluna's renewable-powered infrastructure model offers a compelling play on the intersection of energy, technology, and institutional demand.

References:
[1] https://www.ainvest.com/news/soluna-galaxy-expand-partnership-deploy-48-mw-project-kati-1-2508/
[2] https://www.ainvest.com/news/soluna-strategic-expansion-galaxy-digital-catalyst-renewable-powered-bitcoin-hosting-growth-2508/