Bitcoin mining giant Riot Blockchain posted a net loss of $36.6 million. The Colorado-based company generated a revenue of $46.3 million – down by 28% from the previously estimated $54.2 million.
The rising energy costs have adversely affected many Bitcoin miners. However, Riot’s CEO believes that the company was able to leverage its long-term fixed-rate power contract to generate significant power credits and reduce its operating costs.
Revenue Misses Average Estimates
The widened loss and low revenue were attributed to the lower Bitcoin production from significant curtailment activities associated with the company’s power strategy, as well as a drawdown in the market price of the crypto asset.
For the uninitiated, Riot joined several miners in curtailment processes in Texas to voluntarily shut off their machines to conserve power during times of peak demand. In exchange, Riot earned $13.1 million in power curtailment credits for the third quarter, a major chunk of $9.5 million came in July alone. Due to this participation, the company’s bitcoin production for that month plummeted by 28%.
Riot managed to sell power back to the Electric Reliability Council of Texas at a market-driven spot price and rake in a profit.
As a result of the reduced customer billings due to curtailment, data center hosting revenue, or fees collected for offering infrastructure to other firms’ machines, the company’s revenue dropped to $8.4 million for the third quarter as compared to $11.2 million for the same three-month period last year.
North America’s Largest BTC Mining Facility
Several mining companies have been struggling under tepid market conditions. While Riot’s mining margins have taken a significant hit as well, its US Whinstone facility has emerged as the largest Bitcoin mining operation in North America.
The Whinstone facility is undergoing an expansion project and will double the site’s Bitcoin mining capacity to 700 MW. According to the update, the expansion of buildings and critical infrastructure is expected to be completed in the summer of 2022. Following the completion, Riot claimed that the Whinstone facility could be the most significant Bitcoin mining facility in the world, as measured by developed capacity.
“This expansion includes four new buildings, totaling approximately 240,000 sq ft. and adding 400 MW of capacity. The buildings and critical infrastructure for the expansion are expected to be completed in summer 2022, with the final components of the building being completed in parallel with miner shipments.”
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