Miners are rewarded with bitcoin for completing a block, competing against other miners by solving intricate maths puzzles with energy-intensive computing systems, meaning electricity comprises a significant chunk of their operating costs.ĭeclines in power prices, particularly in the US, have eased pressure on company margins, according to analysts at BTIG, who said the electricity cost for producing one bitcoin has fallen about 40 per cent from the end of last year. But they’ve all still lost money since early 2022.īitcoin mining is the process by which a network of computers validates a block of transactions on the blockchain. The spring thaw has seen investors flock back to publicly traded crypto mining companies Among the biggest players, Marathon (MARA.O) and Riot Platforms (RIOT.O) have seen their share price more than triple this year, while the Valkyrie Bitcoin Miners ETF (WGMI.O) is up 162 per cent and Greenidge has gained 137 per cent. Marathon Digital Holdings’ debt-to-equity ratio has dropped to 0.5 from 2 since the start of this year, for example, while Greenidge Generation Holdings’ (GREE.O) has dropped to 5.8 from 11.7, according to data from Luxor. Miners’ debt-to-equity ratios now look much healthier, said Mellerud, adding that many companies had restructured and paid down debt over the past few months. At the current bitcoin price, these companies’ cash flows have substantially improved and most of them should have no problem paying their obligations,” said Jaran Mellerud, analyst at bitcoin mining services company Luxor.
“Many public miners were on the brink of bankruptcy at the end of last year. They’re still some way off a peak of $61.2 million hit in November 2021, though. That’s a relief for miners that struggled to service large debt burdens as revenues languished between $15 million and $21 million for most of the second half of 2022.
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