Block reward miners put on brave face as BTC price craters

Block reward miners are putting on a brave face despite the past month’s dramatic retreat in the price of the BTC token, which has left nine-figure liabilities on some of their balance sheets.

• Mining economy is in shambles
• Q4 earnings a mixed bag (perhaps flaming on your doorstep)
• U.S. customs slowly releasing Bitmain mining rigs
• February mining shrinkage: “I was in the pool!”

While the situation remains highly fluid given the recent crypto market ‘correction’, as of Tuesday morning, BTC miners were losing around $5,000 for each token mined. This makes last month’s prediction by Mason Jappa, CEO of BTC mining rig distributor Blockware, that BTC mining will remain profitable for “the next 12 years” look even more optimistic.

Jappa claimed that “what needs to happen in the future is mining transactions need to pick up, miners are making more from fees or we have a million dollar Bitcoin price rate.” But since BTC’s artificially constrained bandwidth precludes any such ‘pick up’ in transactions and the fees generated by same, all that’s left is hoping for that million-dollar baby. (Or buying lottery tickets. You do you.)

The plunge in BTC’s fiat value from its all-time high above $108,000 on January 20 to below $77,000 early on March 11 has an even greater impact on miners who adopted a ‘BTC treasury’ strategy, aka buying thousands of tokens on the open market while refusing to sell tokens generated from new block rewards.

Consider the grim facts facing investors in MARA (NASDAQ: MARA). MARA bought 22,065 BTC last year at an average price of $87,205. Given that BTC’s current price is (at time of writing) hovering around $80,000 at the time of writing, MARA’s $1.9 billion buying spree is $154 million in the red. That red ink—unrealized, admittedly—stood at $234 million when BTC briefly dipped to $76,700.

MARA’s stock price is currently hovering around $13.30, less than half the price it was trading at in mid-November during the euphoria that gripped the digital asset sector in the wake of Donald Trump’s election as U.S. president. It can’t help but weigh on investors’ minds that MARA’s BTC binge-buys were largely done via new debt issues, the interest on which will continue to accumulate regardless of BTC’s future price movements.

JPMorgan (NASDAQ: JPM) analysts said publicly traded miners’ aggregate market cap fell by more than one-fifth in February as BTC’s price fell and the mining difficulty rate failed to keep pace. Given that February’s average BTC price vastly exceeded (so far) the March figures, it doesn’t take a genius to know that miners are watching BTC price charts the way farmers scan the horizon for signs of storm clouds.

Tales of the Q4 tapes

Publicly traded miners showed mixed results in their Q4/FY 2024 earnings reports over the past month. For instance, MARA reported Q4 revenue up 37% year-on-year to $214.4 million, while net income shot up 248% to $528.3 million.

However, MARA’s revenue gains were goosed by the BTC token’s price rise, and that trajectory has sharply reversed itself since the new year began. The profit tally also benefited from a $300 million change in the fair value of MARA’s acquired BTC stockpile. MARA notes that a $10,000 decline in BTC’s price would result in the company suffering a $450 million earnings decline. (“Wait, we’re manacled to this anvil?”)

Riot Platforms (NASDAQ: RIOT) generated revenue of $376.7 million last year, up from $280.7 million in 2023, resulting in a net income of $109.4 million versus a $49.5 million loss in 2023. As evidence of mining’s unforgiving economics, Riot’s total cost to mine a single BTC last year was 97% of the value of that BTC, and that’s an improvement over 2023’s 128% pay-to-play ratio.

Bitdeer (NASDAQ: BTDR) reported revenue of $69 million in Q4, down from $114.8 million in Q4-2023. Gross profit fell from $27 million to just $5.1 million, while the company booked a net loss of $532 million. The company blamed the downturn on its decision to prioritize the development of its proprietary ASIC mining rig technology, which took a toll on its hash rate growth.

Alarmed investors swiftly pushed Bitdeer’s share price down nearly one-quarter, prompting the company to announce a $20 million share repurchase program, having fully utilized its previously approved $10 million buyback program. The gambit succeeded in briefly nudging Bitdeer shares northward, but they’ve since surrendered most of those modest gains.

Core Scientific (NASDAQ: CORZ) suffered a net loss of $265.5 million in Q4, although the bulk of that red ink consisted of non-cash adjustments. Revenue fell one-third to $95 million, and Core booked an operating loss of $39.8 million, slightly better than the $43.7 million loss in Q4-2023. And yet, somehow, Core still found the cash to dole out an additional $5.7 million in stock-based compensation.

Hut 8 (NASDAQ: HUT) saw its Q4 revenue slide 18.5% year-on-year to $31.7 million, while net income inexplicably rose 15x to $152 million. It seems that Q4’s gain on digital assets was $308.2 million—twice its profits—so the result would have been far different were it not for the post-election BTC price surge.

TeraWulf (NASDAQ: WULF) saw its FY-2024 revenue double to $140 million but still managed to lose $72.4 million last year, only slightly better than the $73.4 million loss in 2023. It’s worth noting that the company spent $31 million compensating its senior managers last year versus just $6 million in executive perks in 2023.

Concluding our earnings whip-round, Cipher Mining (NASDAQ: CIFR) saw its FY-2024 revenue rise nearly one-fifth to $151.3 million, but the company’s operating loss more than doubled to $43.7 million, and its net loss rose by nearly three-quarters to $44.6 million. Call us crazy, but it’s almost as if BTC block reward mining isn’t a great business model.

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But do the ASICs have green cards?

Last month, reports circulated that U.S. Customs and Border Protection (CBP) was holding hostage up to 10,000 mining rigs imported into the U.S. by customers of Chinese manufacturer Bitmain. Other rig manufacturers, including Canaan Inc. (NASDAQ: CAN) and MicroBT’s Whatsminer, later reported similar disruptions to their efforts to deliver rigs to U.S. customers.

The seizures were reportedly made at the request of the Federal Communications Commission (FCC), which last year accused a Bitmain subsidiary of violating export controls on high-powered chips from Taiwan. But last week, Reuters reported that CBP agents had begun releasing some (although not all) of the seized rigs.

Ethan Vera, COO of mining operator Luxor Technology, believes the CBP and/or FCC were under the (misguided) impression that the rigs contained radio frequency emitting capabilities. Taras Kulyk, CEO of mining gear broker Synteq Digital, echoed Vera’s claims, but offered a less benign explanation for the seizures. According to Kulyk, “There were some folks in the CBP that really didn’t like Bitcoin mining so they wanted to give the entire sector a headache, which they did quite well.”

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February: short, not so sweet

As always, the February 2025 production reports of publicly traded miners are listed below in descending order of magnitude.

The list doesn’t include TeraWulf, which has yet to issue a monthly update this year, suggesting it’s no longer planning to keep investors in the loop regarding its monthly performance. Also missing is Bitdeer, who are apparently too busy testing their new SEAL03 mining chip to share how they performed last month.

• MARA produced 706 BTC in February, down from 750 in January, despite a slight improvement in energized hash rate. MARA CEO Fred Thiel noted that there were three fewer days in February than in January, and there was a higher network difficulty level. As always with the utility-averse BTC, transaction fees comprised only 1.4% of the total rewards the company produced last month.
• CleanSpark mined 624 BTC in February, only two fewer than in January, a result that CEO Zach Bradford was quick to point out came despite the shorter month. (Suck it, MARA!) Bradford has reason to celebrate, as his company will be added to the S&P SmallCap 600 Index as of March 24. Bradford said the inclusion demonstrated “the value of being a pure play, vertically integrated Bitcoin mining company” that has avoided the temptation to branch out into AI/high-performance computing (HPC) data center operations.
• Riot Platforms produced 470 BTC in February, down from 527 in January, despite hash rate being basically flat month-on-month. Riot CEO Jason Les blamed the short month, colder weather leading to higher electricity prices, and ‘planned maintenance.’ Unlike CleanSpark, Riot’s “AI/HPC process remains our top priority,” and Riot expects great things once its Corsicana facility in Texas starts accessing up to a full gigawatt of power next year.
• Iris Energy (NASDAQ: IREN) mined 459 BTC in February, down from 521 in January, a shorter month, yada yada yada. IREN co-founder/co-CEO Daniel Roberts said his company’s mining operations “remain strong and resilient” while its AI Cloud Service “approached full utilization” by the end of last month. Regarding that last item, IREN’s AI Cloud revenue hit $1.2 million in February, a 50% rise from January.
• Core Scientific self-mined 215 BTC in February, down from 256 in January, but that’s the least of its problems. The multi-billion dollar deal Core signed with ‘AI Hyperscaler’ CoreWeave last summer hit a bump last week when Microsoft (NASDAQ: MSFT) reportedly reduced its commitments with CoreWeave after the latter allegedly missed some AI benchmarks and delivery timelines. The reports caused a sharp drop in Core Scientific’s share price, but CoreWeave just signed a deal with Microsoft’s competitor OpenAI, which allowed Core Scientific shares to cautiously inch back up.
• Bitfarms (NASDAQ: BITF) bucked everyone else’s downward trend by mining 213 BTC in February, a dozen more than in January, as its hash rate grew by nearly a full exahash month-on-month. Bitfarms sold 75 BTC last month, up from 42 sold in January, so they’re not only performing better, but they managed to avoid much of this month’s price-depreciation carnage.
• Cipher Mining mined 180 BTC in February, down from 219 in January, thanks to the shorter month and “a brief, planned shutdown” at its Odessa, Texas site. Cipher sold 235 BTC last month, reducing its ‘treasury’ to 1,032 tokens.
• Hive Digital (TSXV: HIVE) mined 89 BTC in February, down from 102 in January. The company’s ‘HODL portfolio’ continues to shrink, falling to 2,620 at the end of last month, indicating ‘strategic’ sales of 52 tokens “to invest in capital assets.” The company appointed Craig Tavares as president/COO of its Buzz HPC unit, aiming to produce $100 million in annual revenue at some unspecified point
• After missing this roundup last month due to being slow off the mark, we can safely report that Canaan mined 82 BTC last month, six fewer than in January. On March 10, Canaan secured $100 million in financing from an unspecified institutional investor with the possibility of an additional $100 million “in the near term.” Canaan plans to use the funds to “fund activities necessary to support the company’s growth.”
• The Bitmain-affiliated BitFuFu (NASDAQ: FUFU) self-mined 59 BTC in February, down from 83 in January. (Its cloud-mining customers produced 161 BTC last month, down from 200 in January.) BitFuFu acquired majority ownership of a mining facility in Oklahoma last month, which the company says will achieve “complete energization” this month.
• Finally, HUT 8 self-mined 46 BTC in February, a nearly 50% reduction from January, as the hash rate took a slight dip. However, the company said deliveries of its new Bitmain rigs are underway, possibly because the CBP has since determined that the rigs weren’t beaming America’s secrets back to Beijing.

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