Publicly traded cryptocurrency mining firm Hut8 reports declining revenue

Earnings decrease due to mining machine stoppage

NASDAQ-listed crypto asset (virtual currency) mining company Hut8 announced on the 11th its financial results for the first quarter (January to March) of 2023. Earnings decreased compared to the same period of the previous year because some mining machines were forced to stop operating.

Revenue was approximately ¥1.9 billion (CAD $19 million), a decrease of approximately ¥3.4 billion (CAD $34.3 million) compared to the same period in 2022. 475 bitcoins (BTC) were mined this quarter, generating revenue of approximately ¥1.4 billion (CAD $14.5 million). This is also down from 942 bitcoins in the same period last year.

Behind the drop in earnings was a 41% drop in the average daily closing price of Bitcoin compared to Q1 2022, as well as an electrical issue at our Drumheller, Alberta facility that resulted in a 15% occupancy rate. sometimes

The company is currently carrying out restoration work on the facility, which is expected to be completed in the next 10-12 weeks.

In mid-November last year, the North Bay, Ontario facility experienced a power outage following a lawsuit with power company Validus over breach of contract.

About 8,000 machines were shut down at the facility due to this problem. Of those, only about 1,000 have been brought back online. It has also been affected by rising electricity prices and the rising average Bitcoin mining difficulty.

Hut8 CEO Jamie Leverton said the company will also work to diversify its revenue streams.

We will continue to strategically increase our Bitcoin inventory towards the Bitcoin halving. At the same time, we will focus on growing our HPC (High Performance Computing) business, including exploring business opportunities in the growing artificial intelligence market.

connection: Countdown to the next Bitcoin half-life less than a year, market trends and expert predictions?

What is half-life

It refers to the timing when the mining reward (= new issue amount) of virtual currency such as Bitcoin is reduced by half. Many cryptocurrencies have an “issue limit” to prevent inflation, and the system is designed so that the amount of new issuance is halved each time the halving period occurs at regular intervals. It is also a notable event peculiar to cryptocurrencies, as the scarcity value increases significantly as the supply decreases, making it easier for the price to rise.

Cryptocurrency Glossary

Merged with USBTC to diversify business

Hut8 announced in February that it had reached an agreement to merge with US cryptocurrency mining and HPC infrastructure company dba US Bitcoin Corp (USBTC). We are currently in the process of consolidating.

The combined company will be called “Hut8 Corp” and will be based in the United States. The new Hut8 is expected to be able to diversify its revenue sources with USBTC’s expandable mining facility, large-scale computer hosting business, and infrastructure management and operation such as data centers.

The merger transaction is subject to regulatory and shareholder approvals and other formalities. Hut8 expects the merger to be completed in the second half of the second quarter (April-June) or the first half of the third quarter (July-September) of 2023.

Hut8 also said that the business integration with USBTC will create geographic diversity for its bitcoin mining operations, allowing it to use different power sources.

It plans to use renewable energy and zero-emission (zero carbon emission) energy in New Brunswick, Canada and Texas, USA.

He also continued to improve mining efficiency by using proprietary proprietary software that monitors mining machines and energy prices in real-time for issues.

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