The three publicly traded U.S. bitcoin miners collectively lost more than $1 billion in the second quarter of 2022. This was the result of a collapse in cryptocurrency prices.
In particular, the net loss of Core Scientific Inc. amounted to $862 million, Marathon Digital Holdings Inc. – $192 million, Riot Blockchain Inc. – $366 million Other major miners such as Bitfarms Ltd. and Greenidge Generation Holdings Inc. were also forced to write down their holdings after a nearly 60% drop in the price of Bitcoin during the quarter.
In the second quarter, miners had to abandon their bitcoin holding policy and sell coins as they were forced to pay off debts and cover operating expenses. They have to use the same tactics of behavior in the third quarter.
“Publicly traded miners are still dumping their bitcoin holdings at a faster rate than they are producing them,” wrote Arcane Crypto analyst Jarande Mellerud. “In July, public miners sold 6,200 coins, making July the second-highest BTC sales month in 2022.”
According to Mellerud, the largest public miners sold 14,600 coins in June and mined only 3,900 coins. The mined coins are not enough to support the activity, therefore it is necessary to sell the previously accumulated assets. Core Scientific sold almost 80% of its coins to cover operating expenses and fund expansion in June. In the same month, Bitfarms sold almost half of its assets to pay off a $100 million loan. Miners also have to take out new loans and sell equipment to stay afloat.
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Losses are recorded not only by miners, but also by crypto exchanges. So, last quarter, the largest US crypto exchange Coinbase Global Inc. received a net loss of $1.1 billion, and MicroStrategy Inc. – $1 billion
Source: bloomberg
