Miner Revenue in March Is at The Highest Levels in Nearly a Year – BTC Mining Firm’s March Update

Bitcoin miners have in March seen the best performing month in almost a year following Do Kwon’s Terra ecosystem collapse that shook the entire industry. March numbers show that mining companies have already grossed around $734.8 million in revenue. Notably, the recent surge in Bitcoin value has led to a substantial boost in hashrate, thereby accelerating block times and generating greater value for the mining sector in both Bitcoin and cash.

Here is a roundup of the performance and state of individual mining companies thus far:

TeraWulf to expand mining capacity further, following mining revenue surge in Q4

Nasdaq-listed Bitcoin miner TeraWulf endured a challenging time as Bitcoin’s value plunged in 2022, with the company’s net loss to common stockholders amounting to $91.6 million. Nevertheless, the crypto mining firm survived, and according to recently released fourth-quarter results, there was a spike in revenue between Q3 and Q4 2022. The report, published on Thursday, revealed that the total revenue generated reached $9.6 million, a 146% increase from the previous quarter. The firm also recorded a significant 46% increase in the cost of operations quarter-over-quarter, totaling $17.7 million.

Mining operations update

The boost in revenue can be credited to the expansion of mining activities at the Lake Mariner establishment – activation of ‘Building 1’ (50 MW) in August 2022 and implementation of a profit-sharing component to short-term hosting contracts. On the other hand, the surge in expenses was attributed to the rise in depreciation costs, as well as an increase in the selling, general, and administrative expenses incurred in expanding mining endeavors at the Lake Mariner facility during the last quarter of the year. For the full year of 2022, the total cost of operations reached $47.7 million, while the full-year revenue was $15 million.

TeraWulf self-mined 524 Bitcoin across the concluded year to achieve a total hashrate of 1.4 EH/s. By the end of February, its self-mining hashrate had swelled % to reach 2.6 EH/s, with a robust deployment of around 26,000 miners. Of this total, the Lake Mariner facility hosts 18,000 operational miners, which make up approximately 13,000 self-miners and 5,000 that are hosted. Meanwhile, the Nautilus facility boasts around 8,000 self-miners.

Looking into the future

TeraWulf is actively seeking to expand its mining capabilities at the Lake Mariner site in New York. The miner plans to integrate the new ‘Building 2’ into its operations. The expansion move is expected to help the facility scale its operational capacity to an impressive 110 MW by Q2 this year. With its sights set on growth, TeraWulf also confirmed it is actively pursuing the potential to increase its mining capacity at Lake Mariner even further to add 80 MW to existing operations, bringing their total capacity up to an impressive 190 MW.

TeraWulf anticipates that the Nautilus facility’s phase one will come fully online in Q2 to yield 50 MW and 1.9 EH/s. TeraWulf could also add another 50 MW worth of Bitcoin mining capabilities to the Nautilus site, which will feature in upcoming TeraWulf expansion phases.  The miner projected its two locations would reach an aggregate operational capacity of 5.5 EH/s (50,000 miners) in Q2 2023, equating to around 160 MW.

Stronghold Digital mined 447 Bitcoin in 2022, a 21% YoY drop

Earlier on Wednesday, Nasdaq-listed crypto miner Stronghold Digital Mining released an operational update for its Q4 and 2022 full-year results.  The report detailed that the Bitcoin mining company increased its revenue by 38%  to $23.4 million from the same quarter in the previous year. This upswing was due to the increase in energy revenues, propelled by the surging PJM power prices hitting record highs in December.

Operating expenses grew by 102% from Q4 of 2021 to $63 million, a surge primarily attributed to the impairments incurred on miner assets, equipment deposits, and the augmented deployment of miners and transformers. Further, the net loss in Q4 nearly tripled to $47.4 million from a year before.  As of March 28, Stronghold was roughly $8.8 million liquid, making up for $7.7 million in cash and a total of 39 Bitcoin. It also had around $59.8 million worth of outstanding debt principal at the time.

Mining operations update

In Q4 of 2022, Stronghold minted 447 Bitcoin through their mining activities, a reduction of approximately 21% from the 567 Bitcoin mined in Q3. The decline was attributed to a reduced mining fleet owing to the return of roughly 26,000 miners to NYDIG and BankProv, and the purposeful curtailment of their mining operations. Since the Q3 2022 earnings report was released, Stronghold has added 7,600 Bitcoin miners, boasting a hashrate capacity of roughly 0.7 EH/s, including 6,000 miners that Stronghold owns and an additional 1,600 miners that are associated with a hosting agreement with FoundryDigital.

Notably, last month Stronghold updated the temporary hosting agreement it had with Foundry since November 7, 2022, with a two-year hosting deal to cover the same 4,500 rigs. As of March 28, Stronghold’s Bitcoin mining fleet surpassed 29,500 miners, with a hashrate capacity of about 2.6 EH/s – this includes over 25,000 miners (2.2 EH/s) that are completely natively owned without any profit-sharing obligations.

Looking into the future

Stronghold expects to achieve 4 EH/s by the end of 2023.  The firm has extended its anticipated revenue for the next 12 months to a range of $94 million to $129 million, surpassing its prior expectation of $108 million to $114 million, and also forecasted its mining efficiency will range between $0.07 and $0.10/TH/s per day, compared to a former estimation of roughly $0.09/TH/s per day.

Bitfarms recorded a $20 million operating loss in Q4 2022

Last week, crypto miner Bitfarms revealed that it logged a $20 million operating loss in Q4 2022 as the price of Bitcoin tanked below $16,000, with the costs of mining and the mining difficulty itself rising. The firm also failed to meet its revised target of 5 exahashes per second by the end of 2022, settling for 0.5 EH/s less.

Q4 financial performance

According to a Mar 21 filing with the SEC, Bitfarms reported a total of $27 million in revenue for the fourth quarter, a decrease from the $33 million earned in Q3 2022. The 13% increase in mining hashrate was offset by the average Bitcoin prices sinking by 15% and the network difficulty rising by 20%. The gross mining profit declined to $8 million from the previous quarter, while the gross mining margin was 33% compared to 52% in Q3.

This three-month period concluded with an operating loss of $20 million, contributed by a $9 million non-cash impairment reversal, a $29 million realized failure on the sale of digital assets, and a $23 million alteration in unrealized gain due to the revaluation of digital assets. This was substantially lower than in the previous quarter, where the operating loss amounted to $98 million. In addition, the net loss, which includes non-operating expenses, reduced to $17 million from about $85 million in Q3.

Mining operations update

In Q4 of 2022, Bitfarms mined 1,434 Bitcoin at an operating capacity of 188 MW and an average of $11,100 in direct cost of production, but it also sold 3,093 tokens in the same quarter.   As of December 31, the firm held $31 million in cash and 405 Bitcoin – since then, it reached 4.7 EH/s early this year and broke 20,000 Bitcoin mined in its lifetime. Across the entire of 2022, the total revenue grew to $169 million, 18.3% up from 2021.

Indicative of a smaller gross margin, the gross profit recorded last year was just $11 million, an astronomical fall of $100 million year-over-year. The $64 million worth of operating income in 2021 was overturned by an operating loss of $284 million. Bitfarms wants to unlock 6 EH/s by the end of the year, according to CEO Geoff Morphy, who also said the firm is actively exploring acquisitions to diversify its mining activities further.

Core Scientific to relinquish $20.8 million worth of equipment to Priority Power

Bankrupt crypto miner Core Scientific, in a similar fashion to when it relinquished 27,000 miners to settle a $38.6 million debt, was last week ordered by United States Bankruptcy Court for the Southern District of Texas Judge David Jones to transfer $20.8 million worth of equipment to Priority Power Management (PPM), to settle a payments dispute. Judge Jones’ approval brings to rest a disagreement between Core and its energy negotiator Priority Power Management, which had claimed the bankrupt firm owed it about $30 million for services it had provided before the miner went bust.

In the summer of 2021, Core Scientific made the decision to enlist PPM as its sole energy manager and advisor, a partnership that involved managing electricity contracts as well as constructing two mining facilities located in Western Texas. However, according to Core Scientific executive Michael Bros, it was evident by May 2022 that the power load expected from the facilities would not be received. As a result, Core Scientific ceased making payments, leading to substantial losses on the part of PPM.

In addition to the settlement cash, the new directive requires Core Scientific to introduce Priority Power to any party that potentially acquires its Texas sites. This would enable the new owners to explore the possibility of engaging in an energy management and consulting arrangement with Priority Power. The energy firm will also retain the sum of $514,000 earned by curtailing power for Core and receive up to a maximum of $85,000 for any legal costs and other expenses as deemed necessary.

Marathon Digital CFO announces retirement, company in search of replacement

Marathon Digital Chief Financial Officer Hugh Gallagher is set to leave the company in May following his decision to close the chapter on leading the mining firm’s finance team. The Nevada-based Bitcoin mining firm communicated the retirement in a Mar 31 press release, adding that it had begun the process to find his successor. Gallagher, who joined the team in March 2022, helped shape and realize the mining firm’s expansion plans

“With hash rate growing and becoming more stable and with the team now in a stronger position, I made the decision to retire. I am proud of the progress we made during my tenure; especially given the various challenges the team overcame in 2022,” Gallagher wrote in a statement.

Marathon Digital is the subject of a securities class action lawsuit filed earlier today by Bernstein Liebhard LLP for misleading investors using false statements.

“Specifically, Plaintiff alleges that Defendants failed to disclose that: (i) the Company overstated the efficacy of its disclosure controls and procedures and internal control over financial reporting; (ii) as a result, the Company’s revenues and cost of revenue were materially misstated during the Class Period; and (iii) the foregoing, once revealed, was reasonably likely to have a material negative impact on the Company’s financial condition,” the law firm said.

The lawsuit, which was submitted to the US District Court for the District of Nevada summed that the mining firm violated the Securities Exchange Act of 1934.

Marathon Digital held $142M in cash deposits at Signature bank

Following the shutdown of Signature Bank last week, a statement from Marathon Digital confirmed the firm still had access to $142 million in cash deposits held at the bank. At the time, the crypto miner said it could leverage these financial resources for the management of its treasury while also ensuring timely payment of all bills as usual. Moreover, Marathon added that it owns more than 11,000 Bitcoin, which affords it financial flexibility beyond the bounds of the typical banking framework.

Navier debuts marketplace for tokenized hashrate products

Bitcoin mining firm Navier last week announced the launch of Reactor.xyz, a new marketplace where qualified investors can buy and sell tokenized hashrate, potentially giving users finer control than other options do. The current model requires that any user who wishes to mine crypto purchases a rig and hosting services where to run from. Alternatively, they could go for cloud mining (renting hashrate) as offered by the likes of Bitdeer.

However, as CEO Josh Metnick noted, those who choose to buy must rely on a third party to provide the appropriate machinery promptly, without incurring any harm, and subsequently commit to a hosting agreement, all while hoping to avoid any hidden conditions or unexpected complications. On the other hand, cloud mining enterprises do not actually allow users control over hashrate.

Navier is employing a two-pronged approach to address these challenges – it is implementing tokenization and also utilizing cutting-edge technology to establish redundancy across multiple sites in order to distribute the load of hash power. Navier aims to guarantee uninterrupted service and achieve 100% uptime by using these tactics. With Navier’s Reactor. xyz, users gain asset ownership along with a specific amount of ERC-721 tokenized hashrate that will be used for mining for a certain period.

To learn more about Bitcoin, check out our Investing in Bitcoin guide.