The three largest publicly traded US bitcoin mining companies lost more than US$1 billion in the second quarter, following several loss-making losses due to the collapse in cryptocurrency prices.
bitcoin miner in dark red
In the three months ending June 30, Core Scientific Inc., Marathon Digital Holdings Inc., and Riot Blockchain Inc. All reported net losses of US$862 million, US$192 million and US$366 million respectively. After a nearly 60% drop in the price of bitcoin during the quarter, other large miners such as Bitfarms Ltd. and Greenidge Generation Holdings Inc., which released results on Monday, were also forced to write off the value of their holdings.
While there has been some respite in crypto mining stocks in recent weeks, they remain largely negative. In the most recent quarter to pay off debt and meet operating expenses, miners were forced to sell some of the bitcoins they were hoarding. During the third quarter, it persisted.
Not only did the miners suffer huge losses in the last quarter; Other members of the sector as well. The largest US cryptocurrency exchange, Coinbase Global Inc., reported a loss of US$1.1 billion, and MicroStrategy Inc. also experienced a net loss of over US$1 billion.
According to Melrud, the top public miners mined 3,900 coins in June, but sold 14,600 of them. In June, Core Scientific sold about 80% of its coins to pay for operating expenses and support development.
To stay solvent, miners are selling off their assets and miners and taking on more debt. Marathon expanded its previous $100 million line of credit in July by refinancing it with a new $100 million term loan from cryptocurrency-friendly bank Silvergate Capital Corp. In addition, the miner sold its mining equipment for US$58 million. B. With Riley Principal Capital II, Core Scientific has signed a shared stock purchase agreement for US$100 million.
The US Securities and Exchange Commission has warned public corporations with significant bitcoin holdings on their balance sheets not to exclude price fluctuations when reporting results. The loss is not realized until the tokens are actually sold.
Featured image from Getty Images, chart from TradingView, and Bloomberg