Canada’s Bitcoin Miners Tinker Strategies Amid Crypto Slowdown

Crypto miners continue to focus on growth as they revalue their balance sheet holdings

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Canada’s top crypto miners are jostling their strategies but maintaining a focus on growth as they try to weather a sharp drop in crypto prices that has led to steep quarterly losses as they revalue their holdings on the balance sheet.

Hut 8 Mining Corp. and Bitfarms Ltd. reported larger net losses of $88.1 million and $142 million respectively for the three months ending June 30, although both reported slightly higher revenues. These were much higher than the $20.4 million and $3.7 million the companies lost in the same period a year ago.

Hut 8 made it clear that the changing fortunes of Bitcoin – the cryptocurrency was trading at US$19,986 at the end of June, up from around US$32,275 a year earlier and the all-time high of over US$65,000 set in November 2021 – played a big part in their bottom line.

“The change reflects the non-cash revaluation loss on digital assets, partially offset by higher revenue and the non-cash revaluation gain on warrant liabilities,” the company said in its quarterly filings, which were released. published on August 11.

During a company conference call last week, Hut 8 chief executive Jaime Leverton told shareholders the company was pursuing a plan to diversify its revenue streams to weather the storm.

“We continue to explore opportunities that will allow us to responsibly generate incremental revenue and anticipate that as markets stabilize we will see compelling options materialize,” Leverton said.

Among these is a Partnership struck in August with digital asset company Foundry Digital LLC, a high-performance computing infrastructure company, which reportedly Hut 8 backs their digital asset mining pool with extensive infrastructure in Mississauga, Ontario.

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We are one of the only digital asset miners to have diversified into infrastructure

Jaime Leverton

“We are one of the only digital asset miners to have diversified into the infrastructure space,” Leverton said.

In March, Leverton said the company was looking to expand into data center infrastructure through the January acquisition of TeraGo Inc. — which provides wireless broadband services to small and medium-sized businesses — and that ‘She also repaired mining computer equipment for other companies.

She also said Hut 8 was actively focused on mining Ethereum and looking to earn interest on its mined bitcoin, a program the company has since canceled.

“We also started working the bitcoin stack we hold on our balance sheet used for yield programs last year,” Leverton said this week.. “We recently unwound these programs just due to the broader contagion in the market, but it’s a strategy we will return to as markets stabilize.”

Leverton said the company remains bullish on bitcoin and intends to continue holding its crypto assets.

While the market carnage has prompted other tech companies to cut staff, Leverton said layoffs and restructuring weren’t strategies the company was considering at the moment and it was expanding its mine site to North Bay, Ontario, which had 5,800 miners. end of June.

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“The base is solid, we continue to actively hire and replace and I don’t see that strategy changing,” Leverton said. “We have a ton of momentum in the business and we’re really confident in our position.”

Likewise, Bitfarms is expanding its mining operations. It began production at a facility known as “The Bunker” in Sherbrooke, Quebec in March and completed phase two of the project in July, increasing its electrical capacity by 18 megawatts. Additionally, the company is looking to complete its international portfolio of production sites (which includes Washington and Paraguay) by contracting a site in Argentina by the end of the year.

A key distinction with Hut 8, which continues to focus on growing its crypto balance sheet holdings, is that Bitfarms has chosen to adjust its long term “HODL Strategy”, by selling bitcoin and improving the company’s liquidity.

While President and COO Geoff Morphy noted that the company mined 31% more bitcoin this quarter, lower prices offset production.

“2022 was one of the toughest times in the history of the bitcoin mining industry due to the steep decline in the price of bitcoin since November 2021 and the more severe price depression beginning in early May 2022. “, said Morphy during the month of August. 15 conference calls. “Yet even in this environment, we continued our growth trajectory and expanded our operations.”

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