Company: CIFRW
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001819989-25-000005
Chunk: 10

Company: Cipher Mining Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 10
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 years.

Change in fair value of derivative asset

Change in fair value of derivative asset was a $7.9 million decrease for the year ended December 31, 2024 and was driven by the fair value of the Luminant Power Agreement. The estimated fair value of our derivative asset was derived from Level 2 and Level 3 inputs, and, due to a lack of quoted prices for similar type assets, is classified in Level 3 of the fair value hierarchy. Specifically, the discounted cash flow estimation models contain quoted spot and forward prices for electricity, as well as estimated usage rates consistent with the terms of the Luminant Power Agreement, the initial term of which is five years.

Power sales

At our Odessa Facility, we sell excess electricity that was available under the Luminant Power Agreement, but not needed in our mining operations, back to the ERCOT market through Luminant. We sold power for proceeds of $5.4 million and $9.9 million for the year ended December 31, 2024, and 2023, respectively.  Power sales fluctuate each period based on power and bitcoin prices which are volatile.

Equity in losses of equity investees

Equity in losses of equity investees totaled $0.4 million for the year ended December 31, 2024 compared to losses of $2.5 million for the year ended December 31, 2023. Equity in losses of equity investees consists of our 49% share in the earnings (losses) generated by our three partially-owned mining sites, and the accretion of the basis differences in our investments in the equity investees that resulted from contributions of miners during the year ended December 31, 2022. We are accreting these basis differences over the five-year useful life of the miners.

Unrealized gains on fair value of bitcoin

Unrealized gains on fair value of bitcoin totaled $11.3 million and $3.3 million for the year ended December 31, 2024, and 2023, respectively. The increase in the current period was primarily due to the increase in our bitcoin treasury compared to the prior period, as well as the increase in bitcoin price in the current year compared to the prior year.

Realized gains on sale of bitcoin

Realized gains on sale of bitcoin totaled $51.5 million and $7.7 million for the year ended December 31, 2024, and 2023, respectively. The