Crypto news: Riot Platforms Navigates Revenue Challenges Following Bitcoin Halving
A crypto mining company reported a drop in revenue from the $76.7 million recorded in the same period last year, primarily due to the Bitcoin halving event in April. The decline is also attributed to a $9.7 million decrease in engineering revenues, though this was partially offset by a $6 million increase in Bitcoin mining revenue. This underscores the firm’s resilience in its core mining operations despite broader financial challenges.
“The second quarter witnessed the Bitcoin network’s ‘halving’ in April of this year, a preprogrammed event that reduces the Bitcoin block subsidy miners receive from the network by half every four years,” stated Jason Les, CEO of Riot Platforms. “Despite this reduction in available production for all Bitcoin miners, Riot posted $70.0 million in revenue,” Les added.
During the second quarter, Riot Platforms mined 844 Bitcoin, a 52% decrease from the 1,775 Bitcoin mined during the same period last year. The decline is primarily due to the Bitcoin block subsidy halving event in April, which cuts the reward for mining new blocks by half approximately every four years. The most recent halving occurred on April 19, reducing miners’ rewards from 6.25 BTC to 3.125 BTC.
This, coupled with increased network difficulty, constrained the firm’s Bitcoin output despite operational efforts.
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The average cost to mine a single Bitcoin for Riot Platforms increased to $25,327, a significant rise from $5,734 per Bitcoin in the second quarter of 2023. This surge in costs is largely due to the block subsidy halving and a 68% increase in the global network hash rate, which indicates the overall computational power used in mining activities worldwide.
Riot Platforms reported generating $13.9 million in power credits during the second quarter, up slightly from $13.5 million in the same period last year. Meanwhile, engineering revenue declined significantly, amounting to $9.6 million compared to $19.3 million in the same period last year, highlighting substantial challenges in this business segment.
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Riot Platforms maintained a strong working capital position of $646.5 million, including $481.2 million in cash on hand. The mining firm holds 9,334 Bitcoins produced through the company’s self-mining operations.
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