Bitcoin Miner Bitfarms Post $142M Loss In Q2 As Rising Energy Prices Bit

Publicly traded Bitcoin mining The company Bitfarms saw a net loss of $142 million in the second quarter, the company reported today.

During the quarter, Quebec-based Bitfarms sold 3,357 Bitcoin for $69.3 million, in part to pay off the outstanding balance on a loan from Mike Novogratz’s Galaxy Digital. At the end of June, the company had 3,144 BTC worth about $62 million, it said in its US Securities and Exchange Commission filing.

The company saw its revenue increase compared to the same quarter last year, $42 million compared to $37 million, as the company increased its hash ratea measure of total computing power of a blockchain. But it was offset by the decline in Bitcoin prices, which fell from $45,868.95 at the start of the second quarter to $19,269.37 by June 30 – that’s a 58% drop, according to CoinMarketCap.

Hash rate is also how crypto mining companies measure their potential earnings. Mining involves the use of advanced computer rigs that race to solve cryptographic puzzles, thereby helping to secure the network and verify transactions, for a chance to receive newly issued cryptocurrency as a reward. Each hash represents a “guess” on a cryptographic string. The miner who guesses correctly wins the right to confirm a block value of transactions and add it to the blockchain. One exahash represents one quintillion such guesses.

“Delivering strong operational growth, we increased our enterprise hash rate by 33% from the beginning of the quarter and by 157% from a year ago to 3.6 exahash per second (EH/s) on June 30, 2022,” Geoff Morphy, Bifarm’s president and operations manager, said in one press release. “After bringing online Phase 2 of The Bunker build, we added further gains in our market share, now approaching 2% of the BTC network, a record for Bitfarms.”

Prices have risen slightly since the end of June. BTC was trading at $24,096.72 on Monday morning. But the increase in hashish rates has been a double-edged sword. The company also felt the bite of rising energy prices.

Bitfarms’ cost of sales of $32 million, which covers utilities and infrastructure, has nearly tripled since the same quarter last year. This was compounded by the fact that Bitfarms added 9,000 MicroBT Whatsminers to its fleet during the quarter, bringing its total hash rate from 2.7 Exahash per second to 3.6 EH/s.