Hut 8 grapples with revenue fall, Bitcoin mining output in challenging Q2 2023
Decreased Bitcoin mining and revenue challenges prompt strategic response from Hut 8.
Hut 8 Mining Corp, the U.S. digital asset mining company, has released its financial results for Q2 2023, ending on June 30. The disclosed statistics present a challenging quarter for the corporation, marked by decreased mining output and a notable fall in revenue.
Hut 8’s revenue experienced a decrease of $24.6 million, falling to $19.2 million in Q2 2023 from $43.8 million in Q2 2022. This decline is partly attributed to a reduced number of Bitcoin mined — a significant 58% drop from 946 to 399 Bitcoins within a year.
The root causes of this mining slowdown include an increase in average Bitcoin network difficulty, a halt in operations at the North Bay Facility, and ongoing electrical issues at the Drumheller site.
In response to these adversities, Hut 8 has implemented several proactive measures. This includes the introduction of new custom firmware to regulate the power supply’s maximum output voltage, ensuring equipment operates within secure limits, expanding repair staff, and acquiring new hardware to expedite repairs and hasten miners’ returns online.
Nonetheless, these efforts are currently struggling against high energy rates, which have resulted in further curtailment at the Drumheller site.
Outside of Bitcoin mining, the company’s high-performance computing (HPC) branch generated $4.2 million of recurring monthly revenue in Q2 2023, slightly down from $4.7 million in Q2 2022. CFO Shenif Visram noted that this dip resulted from discontinuing certain low-margin products and services and customer churn, partially offset by new sales.
Despite the fall in revenue and the limited number of Bitcoin mined, Hut 8 managed to control its costs strategically. As of June 30, 2023, the company held 9,136 self-mined Bitcoin in custody or pledged as collateral, with a market value of $368.7 million. During Q2 2023, 399 Bitcoin were mined, and 396 Bitcoin were sold, generating proceeds of $14.7 million.
Hut 8’s Q2 2023 results depict a scenario of strategic cost management and adaptation in the face of difficulties. Despite a fall in revenue and a significant decrease in Bitcoin mined, the company continues to invest in new strategies and work towards improving its self-mining capacities.
The company is not alone in seeking alternative methods of financial assurance. Another U.S. miner, Riot Platforms, has seen increased returns from selling energy back into the grid, offsetting other mining-related issues. Riot also decreased its cost to mine Bitcoin to $8,300 per BTC.
According to Hut 8’s results, its @Mining Cost per Bitcoin@ is almost three times higher than Riot at $27,148.