Riot Posts $84M in Quarterly Losses as Operations Expand

• The recent Bitcoin halving was estimated to result in $10B in losses for the industry.
• The third-largest Bitcoin miner, Riot Platforms, experienced $84M in quarterly losses last quarter.
• The loss was mainly caused by a 52% YoY drop in the number of Bitcoin mined between April 1 and June 31.

What's the effect on a leading $BTC mining firm when you halve the $BTC mining rate? The answer is a net loss of $84.4M.

That's what Bitcoin miner Riot Platforms reported in its most recent quarterly report.

A Bitcoin halving means miners must expend the same amount of energy they did before the halving for half the reward. That makes it twice as hard (and more expensive) to mine Bitcoin.

However, despite a whopping 340% increase in costs, this doesn't spell the end for Riot Platforms. Let's discuss why.

What Happens After a Bitcoin Halving?Every four years, the reward for mining Bitcoin is cut in half. This is the halving' event; the most recent was in April.

Satoshi, the enigma behind Bitcoin, designed the protocol this way to increase scarcity (there are fewer Bitcoins available) and hence increase its price.

The recent event in April did just that but also boosted associated mining costs.

Often, the buildup to the halving event, rather than the event itself, signals the start of the price hike. However, even $BTC's price performance couldn't compete with Riot's escalating costs.

Riot - Is This The Beginning Of The End?

Is it all bad news for the Colorado-based mining conglomerate?

Not exactly. Riot's mining revenue was up slightly year-over-year, with $70 million for the quarter. That was despite mining 844 Bitcoin, exactly 52% fewer from the same period in 2023.

The real challenge was the mining, which increased from $5,734 per Bitcoin to $25,327. That figure included various energy credits Riot received.

In short, Riot faced - and faces - the challenge of fewer $BTC available per block and rising operational costs to mine those BTC.

Riot Platforms Reports Second Quarter 2024 Financial Results, Current Operational and Financial Highlights. Riot Reports $70.0 million in Total Revenue and Deployed Hash Rate of 22.0 EH/s.

I am extremely pleased to present results for Riot's second quarter 2024, during which we... pic.twitter.com/ZhTOwzLVZA

- Riot Platforms, Inc. (@RiotPlatforms) July 31, 2024

Despite those challenges, all is not lost for Riot. There are headwinds, but there are also several tailwinds:

• $481.2M cash on hand per Riot's latest report
• Working capital of $645.5M
• 9,334 $BTC held unencumbered

In addition, Riot is working off a script. The company has set an ambitious goal of 100 exahashes per second (EH/s) and reached 22 EH/s in the most recent quarter.

To further boost its capacity, Riot has expanded its operations. For example, on April 18, Riot announced the energization of its Corsicana Facility substation. It also purchased Block Mining in July 2024.

Summing Up

Analysts estimated that the recent Bitcoin halving would cost the industry $10B because of increasing power costs. While this has made it difficult for small miners, larger firms have deeper pockets, which makes it easier for them to absorb the costs.

So, while Riot took a hit to the tune of $84M in one quarter, its strong balance sheet, lots of cash, a pile of Bitcoin, and new facilities suggest a positive outlook for the world's third-largest Bitcoin miner.

References

• Bitcoin Halving' Will Deal a $10 Billion Blow to Crypto Miners (Bloomberg)

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