Why Most Public Bitcoin Miners Have Performed Terribly In Their Lifetimes
September 29 2022 - 7:00PM
NEWSBTC
Bitcoin public mining companies have been struggling along with the
rest of the crypto market. With the decline in the price of
bitcoin, these companies had seen their cash flow decline, driving
come to the brink of bankruptcy. However, while it seemed like the
losses that public BTC miners have incurred have happened in the
bear market run, it goes back even father back. Bitcoin Miners Are
Barely Profitable Public bitcoin miners, both large and small, had
grown in popularity over the last year. Their stocks allowed
investors to bet on the crypto market without having to buy any of
the digital assets themselves. Thus, these public miners had seen
millions of dollars in revenue. The problem comes from the ability
of these companies to actually retain their earnings over their
lifetime. Related Reading: Why Single-Digit Gains Is The Best Case
Scenario For Bitcoin This September The retained earnings are how a
company shows its total accumulated net income over its lifetime
and looking at the financial statements of these public miners,
they are less than encouraging. They shows that most public bitcoin
miners have been unable to retain any of their net earnings since
they were founded. An obvious problem with these miners have been
how much of their earnings is being put towards administrative
expenses. This report shows that compared to their counterparts in
gold and oil & gas, bitcoin mines used an average of 50% of
their earnings for administrative costs. Public miners see in
deficit | Source: Arcane Research Additionally, these companies had
committed to extensive expansion plans during the bull market that
has become harder to pull off in the bear market. This has
translated to a steep decline in the retained earnings of most
public miners. Are Any Mining Companies Profitable? Over time,
there are some public bitcoin miners that have been able to go
against the grain and have their retained earnings in the green
even during these troubled times. One of those is the Argo
Blockchain mining company. In a report by Arcane Research, Argo
Blockchain is listed as the only public BTC miner with positive
retained earnings of $26 million. The rest of the report paints a
grim picture of the bitcoin mining industry. Related Reading: Is
Short Bitcoin ETF Exposure Gearing Up For A Squeeze? Most of the
companies had significant deficits of varying degrees throughout
their lifetimes. The largest deficit was recorded by Core
Scientific at $1.304 billion. The next in line is Riot Blockchain
which had seen a significant deficit of $569 million over its
lifetime. BTC holds above $19,000 | Source: BTCUSD on
TradingView.com Others on the list included Marathon Digital, Hut
8, and Stronghold, with deficits of $357 million, $221 million, and
$156 million, respectively. Two others, CleanSpark and Bitframs,
came out with deficits of $154 million and $137 million. What this
shows is that these companies are spending more money than they are
making during this time. The numbers show that even during the bull
market, when the cash flow for BTC mining machines was high, most
of these companies continued to lose money. So investing in the
stocks of these companies should be approached with caution and
proper risk management. Featured image from Blockchain News,
charts from Arcane Research and TradingView.com Follow Best Owie on
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