Cipher Mining Inc

Unless the context otherwise requires, references in this Annual Report to the “Company,” “Cipher,” “Cipher Mining,” “we,” “us” or “our” refers to Cipher Mining Inc. and its consolidated subsidiaries, unless otherwise indicated.

Business Overview

We develop and operate industrial-scale data centers. Our active portfolio and development pipeline is expected to consist of more than 3.0 GW of capacity across 11 sites. We currently operate four bitcoin mining data centers and have a pipeline of seven additional sites in Texas, including one site expected to energize in May 2025. As we develop the sites in our pipeline and source future sites, we evaluate their suitability for either bitcoin mining or high-performance computing (“HPC”). For further details on our data centers, see “—Data Center Portfolio.”

Our current intention is to continue expanding our business by developing and operating industrial-scale data centers for bitcoin mining and HPC, expanding capacity at our current data centers, developing our treasury management platform and entering into other strategic arrangements, such as joint ventures, data center hosting and leasing agreements, or software licensing arrangements. We aim to be a market leader in innovation, including in bitcoin mining growth, data center construction and as a hosting partner to HPC companies.

Data Center Portfolio

We currently operate approximately 327 MW of facilities across four bitcoin mining data centers in Texas, including one wholly-owned data center and three partially-owned data centers that we acquired through investments in joint ventures. We also have a pipeline of approximately 2.8 GW across seven additional sites in Texas, including one site that we expect to energize in May 2025. We will continue to evaluate other sites, locations and partnerships to expand our data center operations, selecting sites that are suitable for bitcoin mining and HPC data centers.

As of January 31, 2025, we operated an aggregate hashrate capacity of approximately 15.7 exahash per second (“EH/s”), deploying approximately 327 megawatts (“MW”) of electricity, of which we owned an aggregate hashrate capacity of approximately 13.5 EH/s, deploying approximately 266 MW of electricity. As further discussed in “—Our Strategy”, we plan to deploy an additional approximately 150 MW for a total of approximately 477 MW of electrical capacity by the end of 2025, and a corresponding hashrate of at least approximately 25.2 EH/s, of which we expect to own approximately 23.0 EH/s, with the remainder being owned by WindHQ, our JV partner. For further details on our joint ventures, see “—Business Agreements—Joint Ventures.”

Odessa Facility

Our largest operational data center is our Odessa data center (the “Odessa Facility”), which is our wholly-owned 207 MW facility located in Odessa, Texas. The Odessa Facility is an approximately 52 acre site, located next to a natural gas power production facility. We began bitcoin mining operations on this site in November 2022 and completed the build out of the site in September 2023. As of January 31, 2025, the Odessa Facility is capable of producing approximately 11.3 EH/s of hashrate capacity. We have developed, and continue to refine, proprietary technology to increase the efficiency of our mining activity and associated curtailment due to changes in local electrical power prices at the Odessa Facility. Our goal is to maximize the time our miners are mining bitcoin at favorable prices and, in contrast, to avoid consuming electrical power when the cost of that power is significantly higher than our anticipated bitcoin mining revenues.

The power at the Odessa Facility is supplied by Luminant ET Services Company LLC (“Luminant”) under a power purchase agreement, pursuant to which we have access, until at least July 2027, to a cost of electricity of approximately 2.7 c/kWh. For further details on our power purchase agreement with Luminant, see “—Business Agreements—Luminant Power Agreement.”

Alborz Facility

Our Alborz data center (the “Alborz Facility” or “Alborz”) is located near Happy, Texas and is partially-owned through a joint venture with WindHQ LLC (“WindHQ”). We have a 49% membership interest in Alborz LLC, which owns the Alborz Facility.

Alborz is currently a 40 MW facility powered solely by Falvez Energy’s Astra Wind Project (the “Astra Wind Farm”), owned by an affiliate of WindHQ, next to which it is co-located. The Alborz Facility’s capacity is approximately 1.3 EH/s, of which we own approximately 0.64 EH/s under the WindHQ Joint Venture Agreement.

Because the sole source of electricity for the Alborz Facility is the nearby wind farm, operating the Alborz miners involves frequent adjustments to the hashing power because of changes in the wind. When there is not sufficient wind to generate enough electrical power for our miners, we curtail our mining activity. For certain related risks, see “Risk Factors—Risks Related to Our Business, Industry and Operations—Bitcoin miners and other necessary hardware are subject to malfunction, technological obsolescence and physical degradation.” We have developed, and continue to refine, proprietary technology to increase the efficiency of our mining activity and associated curtailment due to wind conditions at the Alborz Facility.

We may, with our joint venture partner, Wind HQ, seek to connect the Alborz Facility to the local electrical grid, if we are able to secure applicable regulatory approvals on favorable economic terms. There is no assurance that we will be able to secure such approval on acceptable terms, in a timely manner or at all. If we are able to do so, then our dependence on the wind power supplied by the Astra Wind Farm will be lower and, to the extent that we can supplement electrical power from the local grid at a favorable cost, we anticipate being able to increasingly avoid curtailment time and increase the time spent mining bitcoin at the Alborz Facility. Separately, we may also have the opportunity to expand the capacity of the Alborz Facility up to 163 MW, subject to applicable regulatory approvals. See “Risk Factors—Risks Related to Our Business, Industry and Operations—Bitcoin miners and other necessary hardware are subject to malfunction, technological obsolescence and physical degradation.”

Bear Facility

Our Bear data center (the “Bear Facility”) is located near Andrews, Texas and is also partially-owned through a joint venture with WindHQ. The Bear Facility is connected to the electrical grid. We have a 49% membership in Bear LLC, which owns the Bear Facility. The Bear Facility was expanded in 2024 from 10 MW to 40 MW. It is capable of hashing at a rate of up to approximately 1.6 EH/s. We aim to maximize the time our miners are mining bitcoin at favorable prices and, in contrast, to avoid consuming electrical power when the cost of that power is significantly higher than our anticipated bitcoin mining revenues.

The Bear Facility has the capacity to expand up to 115 MW, subject to applicable regulatory approvals.

Chief Facility

Our Chief data center (the “Chief Facility”) is also located near Andrews, Texas and is also partially-owned through a joint venture with WindHQ. The Chief Facility is connected to the electrical grid. We have a 49% membership interest in Chief Mountain LLC, which owns the Chief Facility. The Chief Facility was expanded from 10 MW to 40 MW in 2024. It is capable of hashing at a rate of up to approximately 1.6 EH/s. We aim to maximize the time our miners are mining bitcoin at favorable prices and, in contrast, to avoid consuming electrical power when the cost of that power is significantly higher than our anticipated bitcoin mining revenues.

The Chief Facility has the capacity to expand up to 115 MW, subject to applicable regulatory approvals.

Black Pearl Facility

Our Black Pearl data center (“Black Pearl” or the “Black Pearl Facility”) is located in Winkler County, Texas. The Black Pearl Facility has conditional interconnection approval from Electricity Reliability Council of Texas (“ERCOT”), the organization that operates Texas’ electrical grid, of up to 300 MW. We expect to energize the 300 MW substation in the second quarter of 2025. We intend to conduct bitcoin mining in the first phase of the Black Pearl Facility of up to 150 MW. The remaining 150 MW of the site is suitable for either HPC hosting or bitcoin mining.

Barber Lake Site

Our Barber Lake site (“Barber Lake” or the “Barber Lake Site”) is located near Colorado City, Texas. The Barber Lake Site has ERCOT interconnection approval of up to 300 MW and includes an energized substation. The site is suitable for developing a data center for either HPC or bitcoin mining.

Stingray Site

Our Stingray site (“Stingray” or the “Stingray Site”) is located in West Texas. The Stingray Site has conditional ERCOT interconnection approval of up to 100 MW. We expect to energize the site in the first half of 2026.

Reveille Site

Our Reveille site (“Reveille” or the “Reveille Site”) is located in Cotulla, Texas. The Reveille Site has interconnection of up to 70 MW, with the possibility for expansion before we energize. We expect to energize the site in the first half of 2027.

Site Options

In October 2024, we acquired the right to purchase three sites in West and North Texas, each with a targeted capacity of up to 500 MW. We will be able to exercise the option in the next 24 months to acquire the sites, including 580 acres of land to be either leased or purchased. Each site has the potential for developing data centers for either HPC or bitcoin mining.

Data Center Sourcing, Development and Operation

Our core business model involves sourcing new sites, designing and developing data center facilities, and operating them for our self-owned bitcoin mining operations or for potential HPC tenants. We believe this process and our team’s expertise are key to our operational success and maintaining our competitiveness. Our team conducts a rigorous process of sourcing, technical design, construction and operations.

Sourcing

Our team’s experience and strong industry relationships offer us insight into sourcing attractive sites. We consider size, energization timing, required power capacity, regulatory approvals, location, anticipated power costs and other factors in evaluating potential sites. We take into consideration requirements for bitcoin mining operations or potential HPC operations.

Our team begins sourcing potential sites up to a few years in advance of planned development. We source new data center locations by acquiring or leasing property that we can develop for use as data center facilities, including constructing on greenfield land. We believe the competition for power capacity and energized facilities is ever increasing, and we also look at opportunities to convert existing facilities for our data center operations or to acquire data centers from other companies.

Regardless of the source of our data center capacity, our team’s goal is to ensure our facilities meet our high standards for operational efficiency and safety.

Construction

After procuring a site, we design and, through cooperation with developers, contractors, and suppliers, build out a facility that meets our advanced design and technical requirements. We believe our team’s industry experience and process serve as a foundation for ensuring our data centers meet the highest standards for operational efficiency and safety. Our team oversees construction project management, including vendor selection, procurement, budgeting, quality supervision, obtaining approvals and more. We believe that these elements are important to ensure the project is completed on time, within budget, and to specific quality standards.

We typically will determine the business model planned for the site prior to construction to best-suit a bitcoin mining data center or a potential HPC tenant’s needs. As we expand beyond bitcoin mining, our approach aims to cater to a range of requirements and site characteristics, including power and water capacity, redundancy, power density, cooling, rack configuration and other technical specifications.

Operation

Our data center operations team manages the daily operation of our data center facilities. Our team’s extensive industry experience and commitment to operational excellence help us meet our goal of safely operating data centers at the highest standards. In 2024, the Odessa Facility was the first bitcoin mining data center to receive the Management and Operations, or M&O, Approved Site award from the Uptime Institute, an independent organization focused on improving the performance, efficiency, and reliability of business-critical infrastructure that has established standards and performance certifications for data center design and construction.

Our team oversees all aspects of our data center’s operations, which include data center performance, miner performance at our bitcoin mining operations, network performance and incident response management.

Our technology team has also developed proprietary software for data center management and optimization, which provides critical real-time information on our data centers’ performance and enables us to optimize our operations. For more information on our proprietary software, see “—Intellectual Property.”

We believe that our team’s experience and high standards for data center operations set us apart from many of our competitors.

Revenue Structure

Currently, our revenue is derived from mining bitcoin. Specifically, we purchase electrical power and use it to run miners that produce computing power. We contribute the computing power we produce to one or more mining pools verifying transactions on the Bitcoin blockchain in exchange for block rewards and transaction fees. This means that we send our computing power, or hashrate, to the mining pool in exchange for a proportionate share of bitcoin mined by the pool. We have no immediate plans to establish our own mining pool. We intend to periodically re-evaluate this as part of our overall strategy going forward and, in the future, we may also decide to stop using mining pools. To the extent that we can produce bitcoin through mining at a cost that is lower than the market price of bitcoin, over the long term we expect to generate profits.

Block rewards are rewards paid in bitcoin that are programmed into the Bitcoin software and awarded to a miner, or a group of miners, for solving the cryptographic problem required to create a new block on the Bitcoin blockchain. Block rewards are fixed and the Bitcoin network is designed to reduce them periodically through halving. Most recently, in April 2024, the block reward was reduced from 6.25 to 3.125 bitcoin, and it will halve again, to 1.5625 bitcoin, which is estimated to occur in April 2028.

Bitcoin miners also collect transaction fees for each transaction they confirm. Miners validate unconfirmed transactions by adding the previously unconfirmed transactions to new blocks in the blockchain. Miners are not forced to confirm any specific transaction, but they are economically incentivized to confirm valid transactions as a means of collecting fees. Miners have historically accepted relatively low transaction fees, but transaction fees vary and it is difficult to predict what transaction fees will be in the future.

We have a portfolio of electrical power that is designed to assist us in profitably mining bitcoin. We purchase a majority of the power for our currently operational data centers at a fixed cost. To the extent that we do not use purchased electrical power to mine bitcoin, we seek to sell that electrical power back to the market. To the extent we can sell such surplus power at a price greater than our cost to purchase it, we expect to generate profits. If we are curtailed by our power provider, we may purchase power from the electrical grid.

Business Agreements

Joint Ventures

On June 10, 2021, we and WindHQ signed a framework agreement for a joint venture for the construction, build out, deployment and operation of data centers in the United States (the “WindHQ Joint Venture Agreement”). We currently operate three data centers (the Alborz Facility, the Bear Facility, and the Chief Facility) that were built under the WindHQ Joint Venture Agreement, each of which is owned by a separate limited liability company in which WindHQ owns 51% of the membership interests and we own 49% of the membership interests.

WindHQ provides the power to the Alborz Facility, and certain construction and operations support. At the Bear Facility and the Chief Facility, electrical power is purchased from a retailer at ERCOT market prices. We manage each data center to mine bitcoin when the cost of electrical power in the relevant market is such that we think we can mine bitcoin profitably. In contrast, when the cost of electrical power is higher than we think makes it possible for us to profitably mine bitcoin, we curtail our mining operations at the data center. The Bear Facility and the Chief Facility do not currently have fixed price power purchase agreements. Depending on market conditions, we may enter into such agreements, but only if we are able to do so on favorable terms, which we cannot guarantee.

Luminant Power Agreement

On June 23, 2021, we entered into a power purchase agreement with Luminant for the supply of electric power to the Odessa Facility, which was subsequently amended and restated on July 9, 2021, and further amended (as amended, the “Luminant Power Agreement”), pursuant to which we have access, until at least July 2027, to a cost of electricity of approximately 2.7 c/kWh. The Luminant Power Agreement provides for a take or pay arrangement, whereby, Luminant will supply, and we are obligated to accept and pay for, a total electrical power capacity equal to at least 66.7% of the full 207 MW capacity each year at a predetermined MWh rate. The agreement also provides for certain curtailment events pursuant to which Luminant has a right to curtail the electrical power delivered in each contractual year.

Subject to certain early termination exceptions, the agreement provides for a subsequent automatic annual renewal, unless either party provides written notice to the other party of its intent to terminate the agreement at least six months prior to the expiration of then current term.

Miner Purchases

The substantial majority of our capital expenditures to date have been devoted to the development and construction of our bitcoin mining data centers and the acquisition of mining hardware. We have purchased miners from Bitmain, SuperAcme, and Canaan.

Bitcoin and Blockchain

Our business model at our currently operational sites focuses on bitcoin mining.

Bitcoin is the oldest and most commonly used cryptocurrency today. As outlined by the seminal bitcoin whitepaper, Bitcoin: A Peer-to-Peer Electronic Cash System, bitcoin is a form of digital currency, or an “electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” Bitcoin depends on a consensus-based network and a public ledger, known as a “blockchain,” which contains the record of every bitcoin transaction ever processed. Transactions listed on the Bitcoin blockchain are verified through a process called “mining.”

The miners we operate are highly specialized computer servers built to use application-specific integrated circuit (“ASIC”) chips that are designed specifically to mine bitcoin. These computer servers are referred to as “mining rigs,” “miners,” and “rigs.” With them we produce computing power, known as “hashrate,” with which we verify transactions on the Bitcoin blockchain. Bitcoin “mining” refers to the process of proposing and verifying transaction updates to the Bitcoin blockchain, which helps keep the Bitcoin network and its blockchain secure.

HPC Hosting

In addition to bitcoin mining, we have been actively pursuing opportunities to develop portions of our sites and power pipeline for HPC hosting and leasing. The expansion of artificial intelligence (“AI”) applications and the expected electricity requirements required for AI data centers has made parts of our power and site pipeline attractive to hyperscalers and other AI and HPC companies. Our business specializes in designing, constructing and managing data centers tailored to support HPC applications. We are currently exploring opportunities with potential tenants to develop some of our sites into HPC or AI data centers, including our Barber Lake facility. For the sites in our development pipeline that are attractive for HPC, we will continue to explore developing them for HPC and entering into long term lease arrangements with hyperscalers or other AI and HPC companies. To the extent we do not find such tenants for any particular site on terms that are attractive to us, then we will consider using the site for bitcoin mining.

Our Strengths

We believe we have strengths that give us a competitive advantage in the data center construction and operations business, including the following.

Valuable assets with strategic adjacencies and potential long-term opportunities

We believe we are strategically well-positioned to continue developing and expanding our data center operations business, and also to enhance them through other long-term opportunities in the Bitcoin ecosystem and beyond. Those opportunities could include, for example, potential partnerships with larger companies in HPC, energy, technology and financial services, as well as offering construction, operational and data science services associated with bitcoin mining or HPC hosting.

We believe demands for data center infrastructure have increased substantially and that the data center industry is poised for continued significant growth, driven by rapid adoption of digital technologies across all sectors, such as bitcoin mining and HPC. We believe our valuable portfolio of data center sites and our ability to continue sourcing and developing sites is a key strategic advantage against this competitive landscape.

Key management’s track record with relevant expertise and capabilities

We have an experienced executive management team with many years of relevant experience and significant industry and technical knowledge. The executive management team has recruited talented employees with experience and expertise in finance, data science, data center construction and operation, power procurement, logistics, and computer science fields. Many of our employees have significant management experience, which complements our business model and talent management philosophy that favors a lean head count structure and the use of third-party vendors and contractors, as well as technology, to reduce fixed costs. We hope to leverage the talents and efforts of the entire team in developing and operating our data centers and in sourcing new opportunities. We believe our team’s experience and ability to source data center sites in the face of extreme demand is a valuable asset to the business.

Scalable operations sourced by identifying attractive site characteristics

We believe we have developed a valuable power portfolio across our current and future pipeline of sites and that we have developed a repeatable power strategy to significantly scale our operations.

With respect to bitcoin mining, we believe that scale can be a key factor in driving cost and margin improvements in the bitcoin mining business, as well as providing a degree of protection against the price volatility associated with bitcoin. As of January 31, 2025, we have deployed approximately 327 MW of electrical capacity across our four data centers, with a corresponding hashrate of approximately 15.7 EH/s, of which we owned approximately 13.5 EH/s. As further discussed in “—Our Strategy”, we plan to deploy an additional approximately 150 MW for a total of approximately 477 MW of electrical capacity by the end of 2025, and a corresponding hashrate of at least approximately 25.2 EH/s, of which we expect to own approximately 23.0 EH/s, with the remainder being owned by WindHQ, our JV partner.

In 2025, we plan to expand deployment of electrical capacity at our existing data centers, including our Black Pearl Facility that is under construction, at our other pipeline of sites, and potentially also at new, yet to be secured, sites. We plan to use cash flows that we expect to generate from our operations and potentially additional sources of financing, or joint venture or other arrangements, to fund the required capital expenditures associated with any potential expansion.

Cost leadership with reliable electricity supply and resilient business model with downside protection against drops in bitcoin prices

Our current portfolio of power for our data centers has an average cost that we believe to be among the lowest in the industry. For further details on those arrangements, see “—Business Agreements—Luminant Power Agreement.” We have access, until at least July 2027, to competitive electricity costs, with a cost of electricity of approximately 2.7 c/kWh. We believe that we operate one of the most efficient mining rig fleets in the global market by running our mining equipment with proprietary software applications that help us maximize computing power output per MW while attempting to minimize unintentional downtime and repair costs. Additionally, our strategy involves curtailing our mining operations, meaning we turn the miners on and off, for a variety of contractual, economic, weather related, business or other reasons. At our sites that do not have contractually fixed price power, for example, we operate our proprietary software to curtail during times when power prices are high; in this way we significantly reduce the prices we pay for power at these data centers. For further details, see “Risk Factors—Risks Related to Our Business, Industry and Operations—Bitcoin miners and other necessary hardware are subject to malfunction, technological obsolescence and physical degradation.”

The overall hashrate of the Bitcoin network is generally correlated with bitcoin price, and any significant fall in bitcoin price may force high-cost miners to cease their mining activities, which would typically result in a decrease of the network power. Because the number of blocks available to be mined is set by Bitcoin protocol irrespective of the network’s hashrate or bitcoin prices, in periods of low bitcoin prices, low-cost producers may have the opportunity to take the market share of less-efficient participants.

We believe that our controlled power costs, whether through contractually fixed price power arrangements or the use of our proprietary data center operations software, use of leading technology, and reliable operations and maintenance services will provide our mining operations with resilience against drops in bitcoin prices.

Our Strategy

Our strategy is to develop and operate industrial-scale data centers for bitcoin mining and HPC, as we aim to be a market leader in innovation, including in bitcoin mining growth, data center construction and as a hosting partner to HPC companies.

Commitment to growth, innovation and retaining flexibility to consider strategically adjacent opportunities to expand our business model

We recognize the value of our data centers and power infrastructure when combined with innovative and disruptive technologies, like bitcoin mining, blockchain technology and HPC. As thecompetition for power capacity and data center locations continues to increase, we aim to capitalize on our commitment to innovation and flexibility by expanding our business to include data center construction for industries beyond bitcoin mining, such as HPC hosting. We believe we have been able to maintain an innovative approach by leveraging our experienced team’s know-how in power origination, data center design and construction project management, and technology. Our commitment to innovation is also demonstrated by our development of proprietary technology to manage data center operations, particularly power management and curtailment.

Similarly, as the Bitcoin ecosystem develops and our business, including our bitcoin inventory, grows, we aim to retain flexibility in considering and engaging in various strategic initiatives that may be complimentary toour bitcoin mining operations. For example, we have enhanced our treasury management platform by engaging market counterparties with which we can hedge some or all of the value of our bitcoin inventory or the value of our expected forward production, and we could consider initiatives such as: (i) lending out bitcoin as an additional line of revenue; (ii) engaging into strategic acquisitions or joint ventures; (iii) leveraging our expected bitcoin holdings to enter into strategic partnerships in the fintech space; (iv) engaging in asset management products; and (v) providing operational support or mining-as-a-service products, which may involve working with infrastructure investors on managed bitcoin mining deployments and other potential projects.

Establish our cost leadership as a bitcoin mining operator and maintain strong relationships with our industry partners

We seek to structure relationships with our equipment and service providers, power suppliers and other potential partners as long-term relationships. We believe this approach will help us expand our operations in a cost-effective manner that will contribute to the operational stability of our bitcoin mining business. In addition, we aim to be one of the lowest cost producers of bitcoin. We believe that will serve us well in bull markets for bitcoin and protect us in bear markets.

Use of mining pools

As part of our operations, we use third-party mining pools to mine bitcoin. This means that we send our computing power, or hashrate, to the mining pool in exchange for a proportionate share of bitcoin mined by the pool. We have no immediate plans to establish our own mining pool. We intend to periodically re-evaluate this as part of our overall strategy going forward and, in the future, we may also decide to stop using mining pools.

Use of custodians

We generally store the majority of our bitcoin in cold storage, unless we transfer it to a trading account to be sold or pledged as security for loans or derivatives we may enter into with market counterparties. We use Coinbase Prime as our primary custodian to store our bitcoin, but also have accounts with other custodians. We periodically re-evaluate these services and, in the future, may decide to use additional or other custodians. As part of our regular treasury management, we consider market conditions and our financial obligations to determine if any portion of newly mined or stored bitcoin should be transferred to the hot wallet for liquidation. See “Risk Factors—Risks Related to Our Business, Industry and Operations—There is a potential that, in the event of a bankruptcy filing by a custodian, bitcoin held in custody could be determined to be property of a bankruptcy estate and we could be considered a general unsecured creditor thereof” and “Our limited insurance protection exposes us and our shareholders to the risk of loss of our bitcoin for which no person is liable.”

Focus on building our operations in the United States

Our operations are currently all within the United States. We believe that the North American market, and specifically the United States, represents a particularly attractive geographic region for data center operations, particularly bitcoin mining. Two key drivers for this are the attractive market dynamics and its stable regulatory environment. We believe that the strong market dynamics in the United States are particularly driven by low-cost energy and reliable power infrastructure, investor interest in bitcoin mining and access to capital markets, access to data center construction and operations talent markets, and potential opportunities to partner with energy industry participants on projects involving renewable energy sources. On the regulatory side, while crypto asset regulation in the United States, as in the rest of the world, is still in development (see “—Government Regulation”), we believe that the regulatory framework for bitcoin in the United States is sufficiently well established and accepted. Furthermore, we believe that the U.S. digital asset ecosystem is more tightly regulated and may attract more compliance-oriented investors, which is expected to contribute to the overall stability of the ecosystem. We may in the future consider establishing operations in other countries, depending on the business opportunity and the relative risks associated with the relevant jurisdiction.

Competition

Bitcoin is mined all over the world by a variety of miners, including individuals, public and private companies, and mining pools. We define our principal competitors as other publicly traded bitcoin miners because there is widely available information about their operations. Several public companies (traded in the United States and internationally), such as the following, may be considered to compete with us:

•MARA Holdings, Inc.

•Riot Platforms, Inc.

•CleanSpark, Inc.

•Hut 8 Corp.

•Hive Digital Technologies Ltd.

•Bitfarms Ltd.

•IREN Limited

•TeraWulf Inc.

•Core Scientific, Inc.

•Bit Digital, Inc.

•Bitdeer Technologies Group

Currently, our data centers are all located in Texas, where we may face significant and increasing competition, because Texas, through its regulatory and economic incentives, has encouraged bitcoin mining companies, like ours, to locate their operations in the state. Texas is also an attractive market for locating AI or HPC data centers. There is also a possibility that, in the future, foreign governments may decide to subsidize or in some other way support certain large-scale cryptocurrency mining projects. See “Risk Factors—Risks Related to Regulatory Framework—Regulatory changes or actions may restrict the use of bitcoin in a manner that adversely affects our business, prospects or operations.”

Thus, we compete against many companies and entities operating both within the United States and abroad. Equally important, as bitcoin price increases, additional miners may be drawn into the market. The corollary would mean that as bitcoin price decreases, miners that are less cost-efficient may be driven out of the market.

Government Regulation

As a company operating at the intersection of data center, bitcoin mining and HPC hosting services, we are committed to maintaining a proactive and adaptive approach to regulatory compliance. We closely monitor legislative and regulatory developments and engage in dialogue with relevant stakeholders to ensure our business practices align with the evolving legal and regulatory framework. Despite uncertainties posed by a changing regulatory landscape, we remain committed to maintaining innovative and responsible business practices in data center, bitcoin mining and HPC hosting markets. We operate in a complex and rapidly evolving regulatory environment and we are subject to a wide range of laws and regulations enacted by U.S. federal, state and local governments, governmental agencies and regulatory authorities, including the SEC, the Commodity Futures Trading Commission, the Federal Trade Commission and the Financial Crimes Enforcement Network of the U.S. Department of the Treasury, as well as similar entities in other countries. Other regulatory bodies, governmental or semi-governmental, have shown an interest in regulating or investigating companies engaged in the blockchain or cryptocurrency businesses. As the regulatory and legal environment evolves, we may become subject to new laws and further regulation by the SEC, the Commodity Futures Trading Commission (the “CFTC”), other federal agencies and state and local governments, which may affect our mining and other activities. For example, on January 23, 2025, the Trump Administration signed an executive order titled “Strengthening American Leadership in Digital Financial Technology,” which introduces new dynamics to the regulatory landscape. This order emphasizes the importance of the digital asset industry in U.S. innovation and economic development, outlining policies to support the growth and use of digital assets and blockchain technology. Key policies outlined in the executive order include ensuring access to open public blockchain networks for lawful purposes, promoting the U.S. dollar's sovereignty through lawful dollar-backed stablecoins, and providing regulatory clarity with technology-neutral regulations. The establishment of a new working group within the National Economic Council to propose a federal regulatory framework for digital assets could lead to significant changes in market structure, oversight, consumer protection, and risk management. The evolving regulatory environment may pose challenges to our operations, particularly if new regulations introduce additional compliance costs or restrict certain activities. Additionally, various bills have been proposed in the U.S. Congress related to our business, which may be adopted and have an impact on us, and governmental agencies and regulatory authorities, such as the SEC, the CFTC, the Federal Trade Commission (the “FTC”) and the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (“FinCEN”), may also enact regulations related to our business, which may have an impact on us

On a state level, there have been several recent legislative efforts to manage power consumption and support grid reliability, which affects our business, as an operator of industrial-scale data centers. In 2025, the Texas legislature introduced legislation to support ERCOT’s grid reliability by proposing minimum transmission rates on certain large loads and removing phantom loads from its interconnection queue to enhance accuracy of actual future load growth. Such regulation may increase the costs of running our current data centers and sourcing new potential sites in Texas. In 2025, the Public Utility Commission of Texas (the “PUCT”) also required operators of large virtual currency mining operations connected to register their facilities with the PUCT. For additional discussion regarding our belief about the potential risks existing and future regulation pose to our business, see “Risk Factors—Risks Related to Regulatory Framework.”

Furthermore, because we may strategically expand our operations into new areas, see “—Our Strategy— Commitment to growth, innovation and retaining flexibility to consider strategically adjacent opportunities to expand our business model,” we may become subject to additional regulatory requirements.

Intellectual Property

We use specific hardware and software for our data center operations. In certain cases, source code and other software assets may be subject to an open source license, as much technology development underway in this sector is open source. For these works, we intend to adhere to the terms of any license agreements that may be in place.

In addition, we have developed and continue to refine certain proprietary trade secrets and software applications to enhance the profitability and operational effectiveness of our data center operations and may continue to develop those applications or others in the future. We hold two granted United States patents and one allowed U.S. patent application. Additionally, we have pending U.S. and foreign patent applications for our proprietary technology used in our data center operations. We rely upon trade secrets, trademarks, service marks, trade names, copyrights and other intellectual property rights and license the use of intellectual property rights owned and controlled by others.

Human Capital Management

As of the date of this filing, we have 43 full-time employees and officers. We believe our employee relations to be good. We aim to attract and retain talented and dedicated employees who contribute to the operation of our business model. As such, we have recruited employees with experience and expertise in the following areas: finance, data science, data center construction and operation, computer science, power procurement, and logistics. We aim to instill an “ownership culture” in all areas of our business model, and our compensation and benefits philosophies are designed to retain our employees and recruit new employees as necessary.

Seasonality

Our annual and quarterly operating results have the potential to be significantly affected by seasonality related to weather and the related energy commodity price volatility. The price of electric power typically peaks during the winter and summer months, and more generally during extreme weather events, which can potentially impact the Company’s results. Additionally, extreme weather conditions may affect the efficiency and uptime of our mining operations which will have an impact on operating results.

Corporate Information

Cipher Mining Inc. was incorporated as a Delaware corporation on August 27, 2021 in connection with the closing of a transaction (the “Business Combination”) pursuant to which Good Works Acquisition Corp. (“GWAC”), a special purpose acquisition company, consummated the merger of a wholly-owned direct subsidiary of GWAC with and into Cipher Mining Technologies Inc. (“CMTI”). Following the Business Combination, the combined company was named Cipher Mining Inc. (“Cipher” or the “Company”). The Company comprises all of GWAC’s and CMTI’s operations.

Our principal executive offices are located at 1 Vanderbilt Avenue, Floor 54, New York, NY 10017, and our telephone number is (332) 262-2300.

Available Information

Our website address is www.ciphermining.com. The contents of, or information accessible through, our website are not part of this Annual Report on Form 10-K. We make our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, as well as beneficial ownership filings available free of charge on our website as soon as reasonably practicable after we file such reports with, or furnish such reports to, the SEC.

Investors and others should note that the Company announces material financial and operational information to its investors using press releases, SEC filings and public conference calls and webcasts, as well as its investor relations site at investors.ciphermining.com. The Company may also use its website as a distribution channel of material Company information. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Email Alerts” option under the Investor Resources tab on investors.ciphermining.com.

The reference to our website address does not constitute incorporation by reference of the information contained on or available through our website, and you should not consider such information to be a part of this Annual Report on Form 10-K.