CAPEX is short for Capital Expenditure. In mining, the term describes investments in assets used to create, expand, or modernize a mining operation.

Typical CAPEX items include ASIC miners, electrical infrastructure, transformers, containers, cooling systems, network equipment, buildings, and other long-term assets.

CAPEX versus OPEX

The main practical distinction between CAPEX and OPEX is the nature of the expenditure. CAPEX is associated with acquiring or creating a long-term asset, while OPEX is associated with ongoing operation.

For example, purchasing a batch of ASIC miners is generally CAPEX, while electricity used to operate them is generally OPEX.

CAPEX affects the amount of financing required, the payback period, cash flow, and the overall investment structure of a mining project.