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Riot leverages Texas power strategy to fund operations as BTC balance increases Riot leverages Texas power strategy to fund operations as BTC balance increases

Riot leverages Texas power strategy to fund operations as BTC balance increases

June 2023 performance report: Riot produces 460 BTC, executes power strategy and plans hash rate boost

Riot leverages Texas power strategy to fund operations as BTC balance increases

Cover art/illustration via CryptoSlate

Riot Platforms, Inc. recently reported its June 2023 Bitcoin mining performance, revealing that it produced 460 Bitcoin while executing an effective power strategy.

The mining firm produced 40% fewer Bitcoin in June, mining just 460 BTC compared to 676 BTC in May.

MetricJune 2023May 2023June 2022Month/MonthYear/Year
Bitcoin Produced460676421-32%9%
Average Bitcoin Produced per Day15.321.814.0-30%9%
Bitcoin Held7,2507,1906,6541%9%
Bitcoin Sold400600300-33%33%
Bitcoin Sales – Net Proceeds$10.6 million$16.5 million$6.2 million-36%71%
Average Net Price per Bitcoin Sold$26,456$27,568$20,627-4%28%
Deployed Hash Rate10.7 EH/s10.5 EH/s4.4 EH/s2%143%
Deployed Miners95,90494,17642,4552%126%
Power Sales$8.4 million$0.5 million$1.9 million1,452%338%
Demand Response Revenue$1.6 million$2.3 million$0.7 million-29%137%

Source: Riot

Despite the drop in sales, Riot was able to leverage its power strategy to generate substantial revenue equivalent to $10 million in revenue. As a result, the combined power sales and demand response revenue equated to an equivalent of a “361 BTC” increase based on the average price of Bitcoin during the month.

Jason Les, CEO of Riot, commented,

“June was a momentous month for Riot, as the results from our mining operations, power strategy and growth plans have all come together.

We announced an initial order of 33,280 MicroBT miners for our Corsicana Facility, which is expected to add 7.6 EH/s to our self-mining fleet and also provides optionality for future orders at the same terms.”

The additional MicroBT miners would increase Riot’s hash rate by 71%, given the current reported figure of 10.7 EH/s.

Bitcoin miners are selling BTC.

The news comes as other U.S. miners looked to capitalize on BTC’s recent price surge to secure profits. In June, BTC mostly traded above $25,000, peaking at $30,750.

According to Glassnode data analyzed by CryptoSlate, Bitcoin miners sold a notable amount of their mined Bitcoin in June to fund their operations. Data shows that Bitcoin miners’ exchange flow peaked at 4,710 BTC on June 20, marking the highest rate in the past five years.

MINERBITCOIN PRODUCEDBITCOIN SOLDPERCENTAGE SOLDBTC HOLDINGS TOTAL HOLDINGS SOLD
Riot460 BTC400 BTC87%7,250 BTC5.52%
Marathon Digital979 BTC700 BTC71.5%12,538 BTC5.58%
Hut 870 BTC217 BTC310%*9,136 BTC2.38%
Cleanspark491 BTC413 BTC84%529 BTC78.07%

June BTC Miner Activity
*(Based on June Production)

Comparatively, Riot sold fewer Bitcoins monthly as the company reported a sale of 400 Bitcoins in June 2023, a decrease of 33% from May 2023.

Riot’s power strategy

However, Riot’s unique power strategy allowed the company to maintain a “competitive edge” and contribute meaningfully to the broader energy grid during Texas’s June heatwave without relying solely on Bitcoin sales for revenue. Les explained,

“As temperatures in Texas reached near record levels during the month and power demand was high, we made dynamic decisions on our power usage based on market signals.

Through our participation in various market programs within ERCOT, the Company generated $8.4 million in power sales and $1.6 million in demand response revenue.”

According to Riot, the power strategy involves participation in ERCOT’s ancillary services and the Four Coincident Peak (4CP) program. The company effectively uses these services to balance electricity supply and demand, even during peak periods.

Riot then sells access to electrical load to ERCOT and receives compensation regardless of whether ERCOT requires a power down. Through the 4CP program, Riot voluntarily reduces power usage during peak periods and, in return, receives credits for future transmission costs.

The flexibility of its long-term Power Purchase Agreement allows Riot to sell power back to the market when it’s more profitable than mining Bitcoin.