Mining Updates – Argo Blockchain, Celsius, Hive Blockchain and Iris Energy
Miners suffered deeply along with other parties in the digital asset space as markets turned worse in the fourth quarter (Q4) of 2022 after an equally disappointing first half. Filings with the US Securities and Exchange Commission reflected this deterioration in the case of public mining companies. An indisputable display of financial mismanagement manifested itself frequently last year, exposing the downside of the banal strategy of holding onto some or all of the generated coins.
The secured loan plan also failed to come to fruition. In 2021 when the markets boomed, most miners sought machine financing to increase production. Contrary to forecasts that base average production costs in the range of $18,000 to $22,000, the markets have crashed and left these players in dire straits. Over the past dozen months, spot prices have fallen significantly into unsustainable areas in terms of mining rigs. The overall performance of mining companies provided evidence that miners need to better anticipate and, more importantly, manage unprecedented risk events, especially those with severe outcomes.
Recent financial and operational reports from mining companies across the board have well illustrated the severity of the effects of debt exposure exacerbated by unforeseen spot price volatility. This pressure forced those with loaned equipment to return them, while others who have endured similar hardships have taken on worse measures such as selling parts of their facilities. Here’s a look at how the operating budgets of miners sit.
Argo Blockchain attributes December’s decline in crypto mined to hostile weather
Bitcoin mining firm Argo Blockchain’s latest filing with the London Stock Exchange revealed that it mined 147 Bitcoin in the whole of December, representing a 26.7% decrease from the previous month. The publicly traded miner voluntarily cut power consumption due to a winter storm in Texas, leaving its otherwise high Bitcoin count at 141 tokens (116 of which were Bitcoin equivalents). In its January 11 operational update, the company noted that its Bitcoin mining margin – a non-standard measure of profitability that excludes mining equipment impairment and the effect of fluctuations in the value of the crypto – rose to 48%, ending the month. before at 29%.
Last year, Argo came very close to bankruptcy, but overcame the situation thanks to an acquisition agreement with Galaxy Digital for the previously owned Helios facility in a $65 million deal. The arrangement, which also included a $35 million loan, helped improve the company’s liquidity position, allowing it to streamline its operating structure. Thanks to this improved financial status, Argo’s total debt fell by $41 million. At the end of last year, the miner had about $79 million in debt and a bank balance of about $20 million after reaping just $2.49 million in mining revenue in December, a 28% drop from November.
Core Scientific boosted Bitcoin production by 5.9% in December, braving the winter storm
Core Scientific quickly weathered the December storm compared to recently released figures, which show that the increased number of Bitcoins mined month on month. A 5.83% jump in Bitcoin production boosted the crypto firm’s mining activity to 1,435 Bitcoin last month.
Bitcoin production and hash rate
The combined update showed that Core Scientific operated about 243,000 ASIC rigs in November and 234,000 ASIC rigs in December for colocation and self-extraction across its US data centers. These generated 24.4 and 23.7 EH/si in the respective months, while self-recovery increased monthly from 15.4 EH/s to 15.7 EH/s. The hash rate adjustment was due to an addition of around 1,000 rigs to reach 154,000 machines in the last month of the year. Overall, Core Scientific produced a total of 1,435 Bitcoin in December, while co-located servers produced 931 coins.
Power limitations
Restrictions aimed at managing power demand and improving the stability of the electrical grid were common for most Bitcoin miners towards the end of last year. Core Scientific was no exception to these disruptions. In total, the reductions accumulated to 5,828 MWh in November and 17,179 MWh in December. The miner filed for bankruptcy in December, citing a sharp decline in Bitcoin prices.
Hive Blockchain mined 4,752 Bitcoin in 2022, representing an 18% addition from 2021
Hive Blockchain’s December operations update, released this week, described the blockchain platform seeing a 20% drop in month-on-month Bitcoin production. The report indicated that the company mined 213.8 Bitcoin in December at an average of 113.2 Bitcoin Per Exahash from its ASIC miners and general graphics processing units (GPUs) to mine altcoins which are then converted to Bitcoin. The firm also generated $3.15 million in revenue from energy price hedging and curtailment of power use.
Hive obtained the equivalent of 184 Bitcoin from the earned cash, according to December prices. In total, the mining company produced a total of 4,752 Bitcoins in 2022 – an 18% increase in production compared to the previous year. This came against a 46% increase in calculation difficulties during that period. The sale of Bitcoin to cover operating expenses, pursue expansion and improve its cash position left Hive’s treasury with 2,348 coins. The Canadian miner is set to continue increasing its hash rate, having recently added 3,570 Bitmain S19j Pro miners to its fleet.
Targeted efficiency upgrade with Intel powered mining rigs
Hive recently deployed the first Intel-powered Bitcoin miners, the company revealed in a January 13 statement. The batch is part of Hive’s purchase order for the rigs, which are based on Blockscale chips, each with an estimated computing power of 110 – 130 terahash/second (TH/s). This figure puts them behind the latest models from Bitmain, such as the Antminer S19 XP and S19 Pro+ Hydro. Nevertheless, they have been identified as potentially disrupting a mining machine market currently dominated by the latter and MicroBT.
Block, Argo Blockchain and Griid Infrastructure sealed supply deals with Intel for these machines when the tech company announced the initiative last February. Hive, which made a similar request in March, received its first order of 5,800 units in December, although it had originally planned to buy 13,000 before reconsideration. More than 1,400 of these have been installed across facilities in Canada and Sweden.
Friday’s announcement indicated that the fleet of custom mining rigs put into operation had lived up to expectations. Although actual numbers from the miner have yet to be worked out, estimates from Intel put their efficiency at 26 joules/terahash (J/T). Hive’s Intel-powered rollout is expected to conclude when it receives the last of its rigs in production by the end of January. In particular, Hive is one of the miners who has done well and wants to stay the course. Following Ethereum’s Merge event that saw the network abandon Proof-of-Work mining that decimated ether mining, the company said it is seeking “some good buys for equipment and for everything in the next six months,” adding that it have enough cash support. .
Iris Energy mined 27% less Bitcoin in December at an average of $17k per token
Sydney-based Bitcoin mining company Iris Energy also shared its December investor update this week. Iris indicated in its January 12 report a reduced performance throughout the month, with 123 Bitcoins mined (down 19%) and an operating income down 27% from the previous month to $2.1 million. The average miner hash rate was 1086 PH/s, a 25% drop from November. This double-digit drop in numbers was a result of the dust settling after the firm stopped some of its hosting deals.
The Australia-based sustainable company ended the year debt-free, with $39 million in cash in the bank. As the firm installed more S19j Pro miners in Canada, its computing capacity grew by 30% to 1.5EH/s. Looking ahead, the miner is taking a cautious approach to navigate the current market conditions and take advantage of potential future growth by exploring ways to monetize its holdings, such as $67 million in advance payments to Bitmain for an additional 6.7 EH/ s with mining rigs. Its primary focus is to increase its self-recovery business. Still, it is considering options to lease its data center capacity in the short to medium term to address the shortage of hosting space in the industry.
Celsius announces the sale of its mining machines for 1.3 million dollars
Bankruptcy lending firm Celsius Network, which operates a mining arm, disclosed Wednesday that it is trading 2,687 ASIC mining rigs in a Texas facility for $1.3 million as part of its bankruptcy filing. Touzi Capital, a California-based real estate investment firm, will make up the cost of the M30S units from MicroBT, including the cost of shipping, according to the sales notice submitted. Worth mentioning, Celsius’ mining operation was backed by the now bankrupt Core Scientific. The hosting provider received approval to shut down mining machines owned by Celsius in a recent development surrounding their dispute arising from alleged breaches and differences of opinion in their hosting agreements.
Other developments
Bitcoin hash rate grows in the first two weeks of January
The mining hashrate, as observed by the tracking dashboard, has increased since December 28, when it dropped to 222 EH/s. So far this year, the metric has increased to 270 EH/s twice. Blockchain.com data also shows that the hash rate for the network has remained consistently above 260 EH/s since January 3rd and held at 262 EH/s at the time of writing. The previous mining adjustment at block height 770,112 saw the difficulty decrease by 3.59%, while the upcoming one is expected to reflect a 9% increase according to estimates.
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