After arguably the worst crypto market downturn in the industry’s short history, miners have launched Riot Blockchain (NASDAQ: UP), Core Scientific (NASDAQ:CORZ) and bit farms (NASDAQ:BITF) were forced to sell part of it their bitcoins (BTC USD) participates in a bid to release capital.
That’s because overall crypto miner performance metrics softened again somewhat in June, as the number of bitcoins (BTC-USD) mined declined by an average of 1.8%, despite mining capacity, as measured by the Hash rate has increased by 8.8% In the table below.
As miners face falling crypto prices, rising energy prices, and heightened competition, Riot Blockchain (RIOT), for example, not only saw its Bitcoin (BTC-USD) mining and hash rate M/M fall in June, but also sold 300 bitcoins for net proceeds of approximately $6.2 million to fund operating expenses, namely the development of its Whinstone facility in Rockdale, Texas. Still, the company holds over 22x that amount of BTC.
Despite this, “having a strong Bitcoin balance sheet is still important to us, so we didn’t sell off the balance sheet per se,” Riot CEO Jason Les told Blockworks on July 14, adding, “There aren’t any strict ones Frameworks or policies around it. It is a decision that we evaluate monthly.”
SA contributor Dilantha De Silva, who began reporting on Riot (RIOT) in late June with a Strong Sell rating, believes the company is “unable to generate sustained profits and reiterates that it is a highly volatile business that will is heavily dependent on fluctuating bitcoin prices.”
Core Scientific (CORZ), which produces the most amount of BTC among its competitors, sold a whopping 7,202 bitcoins (BTC-USD) last month at an average price of about $23,000 per token, for total proceeds of ~$167M . These profits were used to pay for ASIC servers, capital investments in additional data center capacity, and scheduled debt repayments. See why Made Easy – Finance, a contributor from SA, considers stock a ‘Hold’.
Similarly, in June, Bitfarms (BITF) sold 3,352 bitcoins (BTC-USD) for total proceeds of $69 million to reduce overall debt and increase liquidity amid turbulent market conditions.
During June, the Bitcoin (BTC-USD) price plummeted 33% as the financial contagion effect in the crypto market triggered by the collapse of crypto exchange Celsius and crypto-focused hedge fund Three Arrows Capital continues to spread. Unsurprisingly, crypto miners, most of whom pointed to poor market conditions over the past few months, experienced similar drawdowns back then, as illustrated in this chart.
The $1 trillion question on the minds of most people is: where will the price of bitcoin (BTC-USD) go from here? One way to look at the matter is the token’s production cost, which has fallen to around $13,000 from around $24,000 in early June, JP Morgan analyst Nikolaos Panigirtzoglou wrote in a note to clients on July 13. The slump in bitcoin production costs come as BTC miners try to protect their profitability by deploying additional mining rigs and therefore mining efficiency increases, which could negatively impact BTC prices in the future, added he added.
The falling production costs are primarily due to “the decline in electricity consumption according to the Cambridge Bitcoin Electricity Consumption Index, while the hash rate has fluctuated in recent months without a clear downward trend,” explained Panigirtzoglou.
“While the decrease in production costs is clearly contributing to miner profitability and potentially reducing the pressure on miners to sell bitcoin holdings to increase liquidity or reduce debt, the decrease in production costs could have a negative impact on future bitcoin prices. price prospects are perceived,” noted Panigirtzoglou. “Production costs are perceived by some market participants as the lower limit of Bitcoin’s price range in a bear market.”
Previously (June 11) Marathon Digital, Riot Blockchain Bitcoin mining growth slowed the most in May.
|Marathon digital||(MARA)||bitcoins mined||140.1||268||299||235.7|
|bit farms||(BITF)||bitcoins mined||420||431||405||418.7|
|Hash rate (EH/s)||3.6||3.4||3.3||3.4|
|HIVE blockchain||(BEEHIVE)||bitcoins mined||278.5||273.4||268.8||273.6|
|Hash rate (EH/s)||2.17||2.18||2.15||2.2|
|Riot Blockchain||(REVOLT)||bitcoins mined||421||466||508||465.0|
|Hash rate (EH/s)||4.4||4.6||4.7||4.6|
|Hash rate (EH/s)||2.8||2.5||2.4||2.6|
|Hut 8 mining||(HUT)||bitcoins mined||328||309||309||315.3|
|Hash rate (EH/s)||2.78||2.64||2.58||2.7|
|scientific core||(KORZ)||bitcoins mined||1106||1138||1121||1121.7|
|Hash rate (EH/s)||10.3||9.2||8.9||9.5|
|Argo Blockchain||(ARBK)||bitcoins mined||179||124||166||156.3|
|Greenidge generation||(GREEN)||bitcoins mined||230||195||197||207.3|
|Hash rate (EH/s)||2.5||1.7||1.6||1.9|
|Average bitcoins mined||348.8||355.5||362.5|
|Average hash rate||4.08||3.75||3.66|
https://seekingalpha.com/news/3857285-crypto-winter-forces-riot-blockchain-core-scientific-bitfarms-to-sell-some-bitcoin?utm_source=feed_news_all&utm_medium=referral Crypto winter forces Riot, Core Scientific to sell some bitcoin. (Cryptocurrency:BTC-USD)