Crypto mining experienced serious losses last year when prices fell. Several notable players in the space went bankrupt, while others had to take cost-cutting measures and close branches.
This was also reflected in revenue from Canadian cryptocurrency miner Hive Blockchain, which halved to $14.3 million in the third quarter compared to a total of $29.6 million it earned in the prior three-month period.
Hive Blockchain Q3 Result
According to the official reportHive said hedging its power contracts, selling power to the grid and optimizing its operating capacity to focus on maximum profit per KWHR helped it turn a profit from mining operations in Q3 2022.
During this period, it reportedly mined 787 Bitcoin, with a gross mining margin of 25% representing $3.62 million in revenue from mining operations.
The Vancouver-based cryptocurrency miner posted a net loss of more than $90 million as a result of “ASIC and GPU chip impairment which diminished with declining Bitcoin and Ethereum prices and market value position of Bitcoin HODL”.
Additionally, falling cryptocurrency prices significantly affected its mining gross margin, which fell 77% to $3.6 million in Q3 2022 from $15.9 million in the same period a year earlier.
Ethereum mining out of the picture
Q3 2022 was the first quarter in which the company did not mine ETH after the Merge update in September. Hive CEO Frank Holmes remains optimistic even as mining of the world’s largest altcoin was out of the picture. Touching on the subject, Holmes said:
“We are saddened to see the largest margin from Ethereum mining gone; however, our HPC strategy, which has taken longer to implement, is now growing rapidly on a month-to-month basis. We are pleased to share that our strong growth is scalable and could increase 10-fold over the next year as demand for our high-quality chips increases due to huge global demand for AI projects such as GPT CHAT, medical research, machine learning, and representation.”
After the Ethereum-Merge, Hive resorted to selling power to the network and repurposing its GPUs to mine Bitcoin. It also upgraded the existing ASIC fleet to improve overall efficiency. Holmes believes the company’s low-coupon fixed debt, attractive green renewable energy prices, and high-performance and energy-efficient ASIC and GPU chips will further help it navigate through the crypto winter.
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