Bitcoin Miner Riot Platforms Reports a Loss in Q2 Due to April Halving

U.S.-based Bitcoin (BTC) mining firm Riot Platforms reported a loss in the second quarter of 2024 due to a rise in Bitcoin mining costs.

Riot Platforms posted a net loss of $84.4 million or $0.32 per share for Q2 2024, i.e. April- June 2024. In comparison, the company posted a net loss of $27.4 million or $0.16 per share during Q2 2023. The company’ total revenue during Q2 2024 stood at $70 million, as compared to $76.7 million during Q2 2023. It is the first time since Q4 2022 that the miner has posted a quarterly loss.  

The latest quarterly loss can be attributed to the fourth Bitcoin halving that took place in April 2024. The halving reduced the mining reward for a block from 6.25 BTC to 3.125 BTC, effectively cutting it in half.

• The event on the Bitcoin blockchain not only halved the reward, but it also led to a rise of $6 million in mining costs.

• It, in turn, led to a decline in engineering revenues from $19.3 million during Q2 2023 to $9.7 million during Q2 2024.

• In fact, the cost to mine a Bitcoin grew 340% from $5,734 to $25,327, with a rise of 68% in the Bitcoin network’s hash rate.

• The selling, general, and administrative costs dramatically rose 3x from $19.8 million during Q2 2023 to $61.18 million during Q2 2024.

• Nonetheless, the miner managed to increase its Bitcoin mining revenue from $49.7 million during Q2 2023 to $55.7 million during Q2 2024. This is because BTC’s value grew nearly twice over the last twelve months.

As far as Bitcoin mining itself is concerned, Riot Platforms produced 844 Bitcoins during Q2 2024, compared to the production of 1,775 Bitcoins during Q2 2023. The figure represents a dip of more than 50%. Riot’s hash rate grew from 12.4 EH/s in 2023 and Q1 2024 to 22 EH/s during Q2 2024.

On 30 June, Bitcoin’s hash rate stood at 514.9 EH/s. It means Riot Platforms held 4.27% of the global Bitcoin mining power at the time. The company held $481 million in cash and cash equivalents and $585 million in 9,334 unencumbered Bitcoin. Its total assets stood at $2.72 billion on the day.

Riot Platforms not the World’s Second Largest Miner Anymore

In May, Riot tried to acquire its Canadian rival crypto mining firm Bitfarms for $950 million but the attempt ultimately didn’t materialise due to a pushback from the latter. However, Riot continues to pursue to goal as it bought approximately 10 million additional Bitfarms shares worth $2.5 each in July.  

In June, Riot acquired Kentucky-based mining firm Block Mining in a deal worth $92.5 million for two operational sites in Kentucky. Riot shares fell 1.18% to close at $10.19 on 31 July following the release of the quarterly report. Since the beginning of the year, Riot shares have fallen nearly 33%.

With a market cap of $252 billion, Riot Platforms is the world’s third largest Bitcoin mining firm. It has Bitcoin mining operations in central Texas and Kentucky. Riot was the world’s second largest miner earlier, but another U.S. based miner Cleanspark upstaged it because of the decline in Riot’s share price over the last few months.