Mining
Crypto miner BIT Mining (BTCM) as soon as made most of its self-mining income from Ethereum. After the Merge, it’s more and more counting on Dogecoin and Litecoin for recent money.
The miner, primarily based in Ohio and listed on the New York Inventory Alternate, reported income of $72.9 million for final quarter — a near-20% bounce from the earlier interval however down 75% yr on yr.
BIT Mining’s income comes from three major enterprise areas: mining crypto itself, mining as a part of a pool and internet hosting providers in its datacenters.
The agency’s mining pool income got here in at $60 million final quarter, making up 82% of its complete inflows, whereas self-mining and datacenters every introduced in about $6 million.
As famous by analyst Mike Fay (by way of Looking for Alpha), Ethereum mining contributed greater than three-quarters of BIT’s self-mining income main as much as the Merge final September.
The occasion transitioned Ethereum away from energy-intensive proof of labor to proof of stake, eliminating the necessity for crypto miners as a part of consensus.
BIT Mining’s self-mining income predictably nosedived after the change, dropping from $7.1 million in Q3 2022 to $1.9 million within the following interval.
The agency mined $6.2 million crypto within the first quarter of 2023 — most of it litecoin (LTC) and dogecoin (DOGE) after shutting down sure bitcoin mining rigs.
Dogecoin and Litecoin hashrates skyrocketed to all-time highs straight across the Merge, though their hashing algorithms differ from Ethereum’s. Crypto miners are capable of direct their rigs at Dogecoin and Litecoin concurrently by what’s often known as “merge-mining.”
BTCM has drastically underperformed the crypto market, in addition to main miners Riot and Marathon
BIT Mining bought ETH over staking it
Fay discovered one transfer significantly confounding: BIT Mining bought one-third of its ETH holdings between quarters, amounting to 1,602 ETH ($3 million at present costs).
Then again, the agency held 62% extra dogecoin quarter on quarter, going from 42.8 million DOGE ($3.1 million) to 69.5 million DOGE ($5 million). Its bitcoin holdings (289 BTC price $7.8 million) remained unchanged.
Which means BIT Mining’s crypto stability sheet was nearly 28% DOGE on the finish of Q1 2023. Its complete property had been $40.2 million with $39 million liabilities, together with lease obligations.
“The corporate’s crypto treasury administration choices are odd from the place I sit,” Fay wrote in his report. “Whereas I’ve made it no secret that I feel property like Dogecoin don’t have a lot of a future, in my opinion the extra egregious choice is promoting the ETH on the stability sheet when the corporate may very well be producing rewards by staking it natively on-chain.”
Fay continued: “It’s obscure why administration would choose as a substitute for holding meme cash slightly than promoting all DOGE manufacturing and staking Ethereum at nearly no price. BTCM continues to be an keep away from for me.” Blockworks has reached out to BIT Mining for remark.
Due to rising ETH costs this yr, BIT Mining’s ether stash is price virtually the identical
In any case, BIT Mining has reportedly solely managed to generate a optimistic internet revenue for one quarter between 2016 and 2022 whereas more and more diluting its shares as of 2021.
BIT Mining, which instructions a $31 million market cap, is up 85% throughout 2023 up to now however down the identical quantity over the previous yr.
David Canellis contributed reporting.
