Mr. Geoff Morphy reports

BITFARMS EARNS 446 BTC IN DECEMBER 2023 AND 4,928 BTC FOR THE FULL YEAR 2023

Bitfarms Ltd. has provided an update for the month and year ended Dec. 31, 2023.

"In 2023, we executed our growth plan and laid the groundwork for aggressive growth in 2024. We finished the year with $118-million in liquidity, low-cost power contracts for up to 593 MW and a miner purchase agreement for up to 63,888 new Bitmain miners in 2024," said Geoff Morphy, chief executive officer of Bitfarms. "Nearly 70 per cent of new miners will be deployed in our existing U.S. and Canadian farms with the remaining miners earmarked for the Paso Pe, Paraguay, expansion, which is currently running ahead of schedule. We are well under way to achieve our Q2 2024 goals of 12 EH/s and 310 MW operating capacity, which would represent increases of 85 per cent and 29 per cent, respectively, compared to year-end 2023. Additionally, we maintain optionality under the contract with the potential to achieve 17 EH/s and 23 w/TH fleet efficiency before the end of 2024."

Ben Gagnon, chief mining officer of Bitfarms, said: "Strong operations and uptime in December drove our average EH/s on-line up 5 per cent to 6.2 EH/s, crystalizing another solid year of performance for Bitfarms. Our mining operations largely kept pace with network hashrate growth in 2023 generating a similar number of bitcoins YOY, while successfully executing on our core focus and strategy to improve balance sheet strength and prepare for the 2024 halving. In 2024, we expect our core focus to be on executing our Bitmain T21 miner fleet upgrade plan and driving rapid improvements in hashrate and energy efficiency in H1 2024. Our proven capabilities in building and operating facilities will be fully utilized next year as we deploy our largest order of miners to date, driving energy efficiency to 25 w/TH and seeking a larger share of the bitcoin mining network."

Jeff Lucas, chief financial officer of Bitfarms, said: "In 2024, we are building on our financial foundation with a continued focus on effectively utilizing cash flow from operations in our capital efficient growth plan for farm expansion and fleet-wide upgrades. Throughout 2023, we maintained a strong balance sheet during the fourth quarter, and we increased total liquidity by $52-million to $118-million, ending the year with $84-million in cash, $34-million in BTC in treasury and only $4-million in debt. Furthermore, in December, we increased our overall BTC exposure by expanding our Synthetic HODL portfolio by a total of 100 long-dated calls while maintaining BTC held in treasury relatively constant at 804."

Mining review

December production of 446 BTC represented an increase of 13.8 per cent from November as high uptime and a surge in transaction fees of 465 per cent offset a network difficulty increase of 6 per cent during the month. For the year ended Dec. 31, network difficulty increased 103.6 per cent while the BTC price was up approximately 156.8 per cent, resulting in a 61.4-per-cent improvement in year-over-year production economics as measured by U.S. dollar/TH/day.

December, 2023, select operating highlights:

• 6.5 exahashes/second on-line as of Dec. 31, 2023, up 44 per cent from Dec. 31, 2022, and up 2 per cent from Nov. 30, 2023;
• 6.2 EH/s average on-line, up 5.1 per cent from November, 2023;
• 71.7 BTC/average EH/s, up 8 per cent from 66.4 in November, 2023;
• 446 BTC earned, 13.8 per cent higher than November, 2023, and 10.1 per cent lower than December, 2022;
• 14.4 BTC earned daily on average, equal to approximately $612,000 per day based on a BTC price of $42,500 on Dec. 31, 2023.
• At Paso Pe, Paraguay:
  • Finalized the amended contract for an additional 20 megawatts of energy to support expansion of air-cooled warehouse operating capacity from 30 MW to 50 MW for total capacity of 70 MW;
  • Completed the manufacture of the 80 MW transformer, which is now in transit;
  • Nearing completion of the underground cable connections to the ANDE substation.
• At Baie-Comeau, Que.:
  • Cleared the site to house the planned 11 MW H2 2024 expansion and poured the building's concrete footings ahead of schedule.

December, 2023, financial update:

• Sold 444 BTC of the 446 BTC earned, generating total proceeds of $18.9-million;
• BTC held in treasury increased to 804, representing approximately $34.2-million based on a BTC price of $42,500 at Dec. 31, 2023;
• Increased Synthetic HODL by 100 long-dated BTC call options to 135 long-dated BTC call options at Dec. 31, 2023;
• Reduced total outstanding indebtedness during the month by $2-million, resulting in a remaining balance of $4-million at Dec. 31, 2023, all of which is scheduled to be paid by February, 2024;
• Held approximately $84-million in cash and cash equivalents at Dec. 31, 2023.

Conferences and events

Bitfarms plans to attend the following coming events:

• Jan. 16 to 17: 26th Annual Needham Growth Conference, New York -- management is scheduled to present at 4:30 p.m. ET on Jan. 17;
• Jan. 22 to 24: Series of meetings in Florida hosted by Bear Creek Capital;
• Jan. 30: Nasdaq bell ringing, New York.

About Bitfarms Ltd.

Founded in 2017, Bitfarms is a global, publicly traded bitcoin mining company that contributes its computational power to one or more mining pools from which it receives payment in bitcoin. Bitfarms develops, owns and operates vertically integrated mining farms with in-house management and company-owned electrical engineering, installation service and multiple on-site technical repair centres. The company's proprietary data analytics system delivers best-in-class operational performance and uptime.

Bitfarms currently has 11 farms, which are located in four countries: Canada, the United States, Paraguay and Argentina. Powered by predominantly environmentally friendly hydroelectric and long-term power contracts, Bitfarms is committed to using sustainable, locally based and often underutilized energy infrastructure.

We seek Safe Harbor.