Iris Energy Limited

(IREN)

Iris Energy is a renewable energy-focused Bitcoin mining company. Its core proposition is operating large-scale mining facilities powered by low-cost, predominantly renewable electricity sources. The firm’s leadership team and founders have backgrounds in infrastructure development and renewable energy, which informs the company’s strategy of situating mining operations in regions with abundant hydro, wind, or other renewable power resources.

Management:

• Co-CEOs: Daniel Roberts and Will Roberts (brothers, with backgrounds in infrastructure and energy).

• CFO: David Bartholomew (previous experience in financial and infrastructure sectors).

• Strong leadership team with expertise in renewable energy and large-scale infrastructure.

Their business model is relatively straightforward: mine Bitcoin using renewable energy, sell mined BTC for revenue.Sustainability is enhanced by low-cost hydroelectric power, but it remains highly dependent on Bitcoin prices and network difficulty.

USP

1. Unrelenting focus on cost,IREN’s core Bitcoin mining operations showcase both scale and efficiency. The company operates 21 EH/s (exahashes per second) of mining capacity, with plans to accelerate expansion to 50 EH/s by H1 2025—six months ahead of schedule. This growth is underpinned by:

Cost Leadership: All-in cash costs of ~$29,000 per Bitcoin, significantly below industry averages¹

Before we understand this company further lets understand what is Bitcoin Hash rate

Bitcoin hash rate capacity refers to the total computational power used by miners to process transactions and secure the Bitcoin network. It is measured in hashes per second (H/s), with leading industrial-scale miners achieving capacities in exahashes per second (EH/s). One exahash equals 10181018 hashes per second. A higher hash rate indicates a miner's ability to solve cryptographic puzzles faster, increasing their chances of earning Bitcoin rewards.

IREN will is fast climbing this ladder which is existential to miners

World's top Bitcoin mining companies as of February 2025, While currently smaller than leading players, Iris Energy’s planned expansion could position it among the top five miners globally by mid-2025

2. Non-HODL approach

Unlike many Bitcoin miners who HODL (Hold On for Dear Life) their mined BTC, IREN sells its Bitcoin regularly to fund operations and expansion.This reduces reliance on external capital (debt or equity dilution) while ensuring a steady cash flow.Other miners, like Marathon Digital (MARA) and Riot Platforms (RIOT), often hold large amounts of Bitcoin, aiming to profit from long-term price appreciation.

Iris Energy takes a disciplined approach to capital investment, ensuring that funding expansion is sustainable.The company focuses on energy-efficient mining operations, primarily using renewable energy sources, which helps lower operational costs.Unlike Riot (RIOT) and Marathon (MARA), which take on debt to finance aggressive expansion, IREN funds its growth through operational profits.

This approach missed out on potential gains if Bitcoin prices surge, but who knows when BTC will surge so I think I like their pragrammatic approach

When all bets are off?

IREN’s fortunes remain tethered to Bitcoin’s volatility.

• Prolonged Crypto Winter

  • A sustained downturn in Bitcoin prices would reduce profitability, potentially forcing the company to curtail operations or raise additional capital at unfavorable terms.

• Equipment Shortages or Delays

  • Supply chain disruptions for ASIC miners can hinder expansion plans.

  • Rapid obsolescence risk if competitors adopt next-gen hardware faster.

• Location-Specific Risks

  • Extreme weather or geopolitical changes in Canada (or any future site location) can disrupt operations.

  • Hydroelectric power may see fluctuations in availability if climate patterns change significantly (e.g., drought affecting water levels).

• Liquidity & Financing

  • If equity markets for crypto-related firms tighten, it could become more difficult to raise money for expansions or debt refinancing.

As can be seen below drop in BTC prices can erode 60-70% of market cap in no time

Potential Catalysts

1. Bitcoin Halving Cycles

   • The next Bitcoin halving (scheduled for around April 2024) reduces block rewards from 6.25 BTC to 3.125 BTC. Historically, Bitcoin halving events have preceded price surges, but they also reduce mining revenue if prices do not rise.

2. Operational Expansion

   • Bringing new facilities online or upgrading to the latest-generation ASICs can boost Iris Energy’s hash rate and cost efficiencies.

3. Increased Adoption of ‘Green Mining’

   • As ESG (environmental, social, and governance) criteria gain traction, investors may favor miners with verifiable green energy usage.

4. Regulatory Clarity

   • If governments formalize supportive frameworks for green miners or provide incentives for renewable energy usage, Iris Energy could benefit.

IREN is still a highly speculative play due to its near-total reliance on the volatile Bitcoin market.

I use a simple rule based system to go long or remain out of BTC, may be I can use same for IREN.

No positions in stock, that may change anytime, this article is written to expand my knowledge on BTC mining companies

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1. https://irisenergy.gcs-web.com/news-releases/news-release-details/iren-reports-q1-fy25-results