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The massive crash in the crypto market during the second quarter led to a huge selling pressure for miners in order to continue with their operations.
Public listed blockchain platform Riot Blockchain (NASDAQ: RIOT) announced its second-quarter results on Tuesday, August 16. During the second quarter (Q2), Riot reported a net loss of $366 million.
Riot Blockchain in Q2 2022
Of this, $350 million comes as a goodwill impairment charge while $99 million comes through an impairment charge on its Bitcoin reserves. As per the previous report, Riot Blockchain earned $9.4 million in power credits by selling energy back to the Texas grid. In a statement on Monday, the company said:
“We believe our ability to sell power back to the grid at market-driven spot prices, thereby reducing our operating costs, is integral to our overall strategy. While participation in various grid demand response programs may impact our Bitcoin production, we view this as an important part of our partnership-driven approach with ERCOT.”
During the second quarter, Riot Blockchain mined a total of 1,395 bitcoins. The company’s revenue also dropped 8.7% to $72.9 million.
Alike other Bitcoin miners, the company said that the crypto market crash during Q2 2022 severely impacted its earnings. Several crypto miners have to sell their BTC holdings to cover their operational costs. However, Riot and some of the other big payers took this opportunity to consolidate the market share by deploying the new-generation hardware.
During Q2, Riot’s hashrate jumped 2.3% to 4.4 exahash per second (EH/s). Riot anticipates it to reach 12.5 EH/s by the first quarter of 2023. “We are extremely encouraged by Riot’s financial resilience and operational achievements this quarter,” said CEO Jason Les.
Bitcoin Miner Losses Surge to $1 Billion
During the second quarter, the three largest publicly traded Bitcoin mining companies booked a collective loss of more than $1 billion. Core Scientific, Marathon Digital, and Riot Blockchain reported net losses of US$862 million, US$192 million and US$366 million, respectively.
All of these three companies have also seen their stock prices crashing significantly this year. The RIOT stock has been trading at a 60% discount year-to-date. Jarand Mellerud, an analyst at Arcane Crypto, wrote in a research note:
“Public miners are still dumping their Bitcoin holdings at a higher rate than their production rate. Public miners sold 6,200 coins in July, making July the second highest BTC selling month in 2022.”
In order to stay afloat, the miners have been raising more debts by selling their holdings and mining rigs.