12 min read“Our goal as a Bitcoin miner is to always stay on the longest”
By the time the city of Henderson built its first district in 1941, Gene Hackman was 10 years old and had already decided he wanted to be an actor¹, media giant Ted Turner was discovering boarding school², and a two-year-old Francis Ford Coppola had just moved with his family from Detroit to New York, destined to shape a unique legacy³.
Grounded in the middle of the desert, just a few kilometers from Las Vegas, this township—named after U.S. Senator Charles Henderson—was once called the “City of Destiny” by John F. Kennedy. After serving as the center of U.S. magnesium production, essential for munitions in World War II, the city evolved into a recreational retreat, known for its family-friendly facilities, ranches, and hiking trails.
This is where we visited CleanSpark’s headquarters—housed in a humble building, camouflaged between a law firm and an eye surgery center. Discreet from the outside, the office is clearly well-equipped; a CleanSpark employee opened the door for us before we even rang the bell. Derrick, the CEO’s executive assistant, had already set up everything for our arrival.
This meeting took place while Las Vegas was hosting CES, giving us the perfect opportunity to sit down with one of the biggest U.S. Bitcoin miners. Our goal? To better understand CleanSpark’s trajectory and future plans, particularly as a new U.S. President has officially assured his support for the industry.
Dressed impeccably in a tailored two-piece suit, Zach Bradford welcomed us into his spacious yet understated office, where Bitcoin- and Satoshi-themed art and memorabilia were carefully displayed. Focused and direct, the CleanSpark CEO and President agreed to answer all of our questions.
“Why Henderson?” we asked. “You don’t have any mining sites here.”
“It’s way too hot for that,” he replied. “But, we have a great airport that gets the team everywhere we need to be quickly. And, we can run all our mines remotely from a room just down the hallway.”
The mining business is undoubtedly intriguing—let’s dive in.
This interview has been edited for clarity.
When did you pick up an interest in Bitcoin?
We founded the company in 2014 and we were in the energy space. The origin story for bitcoin mining was the result of a visit I made to a data center in 2020 that was mining Bitcoin. My visit was to discuss an energy project with them but as I came to better understand what they were doing and digested the models we built of how the power of savings would impact the revenues I got interested in their business, rather than selling a product to their business. You know, the COVID lockdown happened, and with time at home I did a lot of research and went down the bitcoin rabbit hole. Until then, I had been a skeptic about Bitcoin. Based on everything I learned, I slowly shifted my own viewpoints on bitcoin, and recognized it as a positive financial tool. By the end of that same year, I proposed to the board that we acquire the data center and its bitcoin mining operations instead of focusing all our efforts on the energy business. Six months later, after successfully integrating the bitcoin mining datacenter into CleanSpark, I went to the board and suggested we sell the Energy company and go all in on bitcoin mining. So, one way to look at it is that I was a little bit late to the game on Bitcoin in general but the reality is that I think I learned the business from a totally different viewpoint, which was incredibly valuable. I was frustrated with the status quo in energy. We were in the business of renewables and renewables never seemed to economically pay off. You want to change the world in a positive way, and when it just doesn't make sense financially without consistent government intervention. Taking energy and turning it into Bitcoin, which can benefit the world in a whole new way, was for me a big change.
How do you reflect on the journey of the company?
I'm very pleased with the journey, and with every step: things happen for different reasons. We've taken a very counter-cyclical approach from mining our first Bitcoin in December of 2020. A month later is when Bitcoin started the first bull market that I was part of, and it put us in a position where we could grow to grow and to keep up with the headlines, or we could slow down just a little bit. So, we grew, but we grew to accomplish strategic milestones, and we didn't grow as much as some of our peers. Instead, we kind of grew slower through the bull market and when the bear market happened, we doubled down at the right time and we grew very quickly. We bought assets when they were cheap, which has been a big part of our journey, doing the opposite of what others have been doing. It allowed us to grow more hashrate over the last 24 months than anybody else and we're on a trajectory where we are currently⁴ the second largest miner by hashrate and we intend to maintain and potentially improve that position. But importantly for us, it's about being the top three in hashrate production, and other critical metrics like; fleet efficiency, marginal cost per coin, uptime, and bitcoin treasury balance. It's not about being the biggest and our journey through that process has been waking up every morning and measuring today for what today is rather than what we want it to be. We act according to what Bitcoin is doing, and we take a viewpoint on its direction. We'll sell Bitcoin in some markets and will hold Bitcoin in other markets. It's about being willing to make our own decisions and not worrying too much about the headlines.
Would you say this frugal approach helped you to face the bear market?
I think so. We were strong as we entered the bear market. A lot of our peers had a lot of debts, they were essentially weak. They had to use funds to cover debts, instead of their growth. Our Strength allowed us to buy large amounts of distressed assets both operating sites and fresh Greenfield sites that we could build at bear market costs instead of being positioned to finish a site at very expensive bull market costs. It's been incredibly important for us.
Are you exploring jurisdictions outside the U.S. Or you plan to stay focused on the country?
Our trademark is America's Bitcoin miner. There's a lot of growth in the U.S. but we think of that phrase in the same way that Coca-Cola: as a U.S company, they are in every country. On a long-term basis, I think we will be in many countries but, right now, the easiest and quickest path for us to grow is in our own backyard. There are enough opportunities for the foreseeable future for that to happen. The opportunities overseas are different. They come with their own risk profile and what we're looking for, if we were to go overseas, there needs to be a cost benefit. That means not 10% better, not 20% better, but meaningfully better than that, and that's what will push us to take action on international opportunities.
How do you expect the Trump Administration to affect the Bitcoin mining landscape?⁵
I think it'll be positive for our space. What we've had for the last four years is an Administration that's been against it. What's important is, there's a lot of promises that have been made but who knows if they will be delivered on. The reality is that even if we ended up with a neutral environment, that would be better than the last four years. In a best-case scenario will have a very strong tailwind in support of the industry and in a worst case scenario will have neutral winds and both scenarios are better than it's been the last four years. (NOTE: this interview took place before SEC rule SAB121 was repealed and the various EO’s were signed)
One could say that there is still a negative perception towards the Bitcoin mining industry by the public. Do you think that a shift is happening?
Yes, I do. Some of that comes from what we refer to as our front door approach: when we go into a new community, we interact with our communities very actively I think, historically the relationship with some miners was very fear-based. A lot of companies when they built a new mining site they didn't ask for permission, didn't interact with the community at large. Instead they attempted to do it on their own. When communities recognize the benefits Bitcoin mining brings both from a tax base, from a job base [the perception shifts]. Taxes are probably the most important thing because we can provide an outsize return to the community’s tax base, as opposed to the number of jobs that we offer. At a community level, we're seeing strong feedback on the positive impact our business has, seeing certain states that are embracing CleanSpark and the industry broadly. Wyoming, both on a legislative level and at a community level. Tennessee, in particular. That being said, there's still work to be done. There's some pros and cons to this, but we're going to enter an environment where Bitcoin will be somewhat politically charged from a control of the network point of view, maybe a hash war of sorts? We see nation states like China, Russia continue to build their hashrate, and the U.S. is going to respond. When it becomes an issue at that level, I expect that we will see additional support roll out, whether it's at a governmental level, or at a community level.
Did you expect the Bitcoin ETF to have such an impact?
I think it had a smaller impact on price than I thought it was going to. It's definitely had an impact on supply and demand. The biggest impact ETFs had was making Bitcoin more mainstream. This impact was as expected, but the secondary impacts are still building: the price impact, the supply impact.
“We are currently sitting at a 66% gross margin per bitcoin”
You announced last year a future launch of an in-house trading desk: how is it going?
We are in the process of rolling it out. We are conservative around our approach, and that has dictated how quickly we rolled it out. We have over 10,000 Bitcoin, our conservative approach is to ensure we monetize those the best.
There's a risk every time you use an asset to generate additional cashflow. We are very cautious about counterparty risk. We could potentially hand our Bitcoin to somebody and get a return for it tomorrow. But we're not going to do that until we're ready to trust that counter party on the other side. We expect that our first trade will probably happen in February. So, we're really close to launching.
Are you exploring using your facilities for AI?
I think we are the only company that hasn't been talking about it. Well… I should take that back, we are talking about it, we're actually talking about not doing it. We believe that we're the best Bitcoin miner and we think that partially comes from being laser focused on always improving what we're doing. We were mining Bitcoin last quarter at $36,250. That means we are currently sitting at a 66% gross margin per bitcoin. All the AI deals that we've looked at, and we've seen things come across our desk, none of them can provide immediate cash flows in the same magnitude.
Everything else requires a big investment now with the hope that there's a customer in two years. Bitcoin is the best way to go. We have 31 different data centers. Maybe we consider it at the next bear market, at which time it may make sense to use the power contracts under pinning our data centers to monetize them for AI instead of Bitcoin. Until the dynamic shifts from the current profitability of Bitcoin, I don't see us making any changes.
Speaking of the next bear market - I’m not asking you any prediction about when it will come but what shape do you think it will take?
I don't think we'll see the same depths that we saw before. Now, that's likely going to come down to a few macro events, but interestingly, maybe one of the most important is The Staff Accounting Bulletin 121, it allows banks to hold Bitcoin. Making it easier to hold Bitcoin. If one doesn’t have to open an account at an exchange, if one doesn’t have to get a hard wallet, if one doesn't have to do all these things, then adoption will increase further. Ultimately, if adoption increases, I think that it won't drop as much as prior cycles. So, whatever the peak is, I think the pullback will be smaller.
How we're preparing regardless of the actual peak or pull-back is that we have one of the most efficient fleets. If you look at global hashrate, a lot of machines must unplug before ours because they are less efficient: we have good power prices, operating in good business environments. Our goal is to ensure that we always can stay on the longest, we want to be amongst the top 20 to 25% most efficient globally and that protects us from the downside because even if Bitcoin turns the opposite direction, there's a lot of other people that would quit mining before we do and we think that's the most important piece.
Could you craft your own chips?
In the first five years of the business, when we were still operating the energy business, we actually manufactured switch gear, we built software, we did all these things. I know how hard it is to manufacture and how hard it is to write software. Rather than make investments or even try and make something ourselves, I would rather have optionality. So our supplier produces the best machine today, I want to buy that machine. If someone else produces the best machine tomorrow, then I want to buy that machine. If instead we try to build it or invest, we start to shoehorn ourselves and we remove our optionality. We don't want to put ourselves in a position where we've invested tens of millions of dollars in something without any return. I think it just complicates things.
I would like to go back to what you said about not wanting to be the biggest miner: can you explain to us this strategy?
One of the reasons we have the scale we have is because we have grown strategically in a non-ideological way that usually doesn't involve headlines. If I only wanted to build for a headline, I would only build when I could announce a big site while instead, we have acquired a lot of small sites that we run very efficiently and, 10 megawatts 10 times is still 100 megawatts. We’re not opposed to becoming the biggest, but we don't want to become the biggest just to be the biggest. I think that there are players in the industry that only have this metric. If they can't be the biggest and produce the most Bitcoin at all costs, they don't have anything. We instead would rather have our operational excellence always underpin what we do. I think that chances are we will become the biggest because we will end up with the financial underpinnings of how we operate that will create opportunities, success and good partnerships for the future. It's very expensive to fight a fight over the ideology of being the biggest.
How do you implement this strategy?
The magic happens in the intersection points. We haven't required that every site has a headline that says the lowest power price: if I sat around and waited for every site that was going to be 3.5 cent power, I wouldn't grow. I could find one site every four years because they do exist. We have a lot of sites that are operating around 4 and a half cents, so my power cost may be slightly higher but with the ability to mine Bitcoin today instead of in three years, I will produce far more Bitcoin and far more cash flows in that time period than in waiting for some magic number. Therefore, we are fine to have slightly higher power prices. They don't need to be the best, they just need to be good. Moreover, the magic with having a slightly higher power price is what comes with it and that's uptime: in order to get 3.8 cent power, I may have to go to Texas and I would potentially have to curtail 20 to 40% of the time. Instead, I can have 10 or 15% more in power costs, and I can mine nearly 100% of the time. Again, it's about being strategic versus ideological.
¹ https://www.deseret.com/1988/8/18/18775376/gene-hackman-least-likely-to-succeed/
² https://www.jermainebrown.org/posts/ted-turner-part-1-maverick-in-the-making
³ https://archive.nytimes.com/www.nytimes.com/books/first/s/schumacher-coppola.html?scp= 39&sq=detroit%20mi&st=cse
⁴ as of January 2025
⁵ This interview has been realized before Donald Trump inauguration
