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The Bitcoin halving event and increased network difficulty led to a rise in the average direct cost to mine Bitcoin, which increased to $25,327 from $5,734 per Bitcoin in the second quarter of 2023.
The US-based Bitcoin miner Riot Platforms (NASDAQ: RIOT) reported its Q2 numbers with the net losses widening to $84.4 million. The development comes as top Bitcoin mining firms faced the heat of the Bitcoin halving in April that reduced the miner rewards to half while increasing the mining costs. The loss per share was $0.32, twice the estimate of $0.16 per share.
Riot’s loss in Q2 2024, has surged by nearly 3x than the $27.4 million loss reported during Q2 2023. The reason behind the widening of the loss is majorly due to the selling of Bitcoin holdings to cover operational costs, as well as other general and administrative costs totaling $61.2 million, again a 3x surge from Q2 2023.
For the second quarter, Riot Platform reported a revenue of $70 million, 8.75% down year-on-year. However, although the engineering revenue took a dip, the Bitcoin mining revenue surged last quarter.
Moreover, Riot also reported a 52% drop in Bitcoin production, dropping to 844 BTC from 1,775 BTC quarter over quarter. The ‘halving’ event and increased network difficulty led to a rise in the average direct cost to mine Bitcoin, which increased to $25,327 from $5,734 per Bitcoin in the second quarter of 2023. During the last quarter, Riot also doubled its hashrate to 22 EH/s and expects its self-ming hashrate to surge to 36 EH/s before the end of 2024.
The company reported $13.9 million in power credits for the quarter, including $4.4 million from demand response programs, which helped lower its average energy cost.
Riot Turns Aggressive on Bitfarms Acquisition Strategy
As per the July 31 filing submitted to the US Securities and Exchange Commission (SEC), riot has further intensified its Bitfarms acquisition strategy by buying a total of 10 million additional shares of the firm. Previously this year, Riot Platforms tried a hostile takeover of Bitfarms, however, couldn’t succeed much.
In mid-June 2024, Riot planned a $950 million buyout of Bitfarms, however, admitted defeat in the later stage. “[It’s] clear that engaging with the incumbent Bitfarms Board on a potential combination is just not possible,” said Riot in an official statement.
In the Q2 report, Riot CEO Jason Les also shared the company’s other accomplishments such as the energization of its second large-scale facility in Corsicana, Texas. This facility already has two buildings with a 200 megawatts capacity. The company is planning to make two more buildings operational by the end of 2024.
During the last month of July, Riot Platforms expanded its growth pipeline with the acquisition of Kentucky-based Block Mining Inc. This acquisition added 60 MW of power capacity across two facilities, with the potential to expand to over 300 MW by the end of 2025.
After the Q2 report on Tuesday, the RIOT share price tanked another 1.18%. While the rest of the Bitcoin mining firms like CleanSpark are up in 2024, the RIOT stock has been facing some selling pressure.
