tag:blogger.com,1999:blog-4503292949532760618.post5439481128731128413..comments2024-03-28T07:23:23.408-07:00Comments on DSHR's Blog: Mining NewsDavid.http://www.blogger.com/profile/14498131502038331594noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-4503292949532760618.post-36123284942877926002022-11-26T12:50:40.467-08:002022-11-26T12:50:40.467-08:00Luis Ferré-Sadurní and Grace Ashford report that N...Luis Ferré-Sadurní and Grace Ashford report that <a href="https://www.nytimes.com/2022/11/22/nyregion/crypto-mining-ban-hochul.html" rel="nofollow"><i>New York Enacts 2-Year Ban on Some Crypto-Mining Operations</i></a>:<br /><br />"New York became the first state to enact a temporary ban on new cryptocurrency mining permits at fossil fuel plants, a move aimed at addressing the environmental concerns over the energy-intensive activity.<br /><br />The legislation signed by Gov. Kathy Hochul on Tuesday was the latest setback in a bruising month for the cryptocurrency industry, which had lobbied fiercely against the bill but was unable to overcome a successful push by a coalition of left-leaning lawmakers and environmental activists."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-59535659718388461202022-11-26T12:47:29.023-08:002022-11-26T12:47:29.023-08:00Iris Energy's warning was prophetic, as Molly ...Iris Energy's warning was prophetic, as Molly White reports in <a href="https://web3isgoinggreat.com/?id=iris-energy-defaults-on-100-million-loan-unplugs-miners" rel="nofollow"><i>Iris Energy defaults on $100 million+ loan, unplugs miners</i></a>:<br /><br />"Iris Energy has defaulted. Unable to pay the $7 million/month in debt obligations with their $2 million/month gross profit, Iris Energy has powered off 3.6 EH/s worth of mining capacity.<br /><br />Iris Energy's stock has plummeted to $1.66, down 93% from its $24.80 peak when the stock first began trading a year ago."<br /><br />It isn't just exchanges that are in trouble. As we've been saying, investing in expensive to buy, expensive to run, rapidly depreciating mining rigs works great when BTC is heading moon-wards. Otherwise, not so much.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-24413185754369636042022-11-02T15:33:01.109-07:002022-11-02T15:33:01.109-07:00Molly White reports on another miner's trouble...Molly White reports on another miner's troubles i n <a href="https://web3isgoinggreat.com/?id=iris-energy-bitcoin-mining-firm-close-to-defaulting-on-loans-of-103-million" rel="nofollow"><i>Iris Energy Bitcoin mining firm close to defaulting on loans of $103 million</i></a>:<br /><br />"Iris Energy, an Australian "sustainable Bitcoin mining company", has announced that they are close to defaulting on loans used to purchase $103 million of Bitcoin mining rigs. These machines depreciate in value quickly, and are currently estimated by the company to be worth $65–$70 million. At the moment, they produce $2 million in gross profit from mining Bitcoin, which is not sufficient for the company to meet the $7 million of loan payments each month."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-60835352472267233312022-10-27T14:35:31.588-07:002022-10-27T14:35:31.588-07:00Lin Cheng and Carly Wanna report that Bitcoin Mine...Lin Cheng and Carly Wanna report that <a href="https://www.bloomberg.com/news/articles/2022-10-27/bitcoin-btc-miner-core-scientific-says-it-may-seek-bankruptcy" rel="nofollow"><i>Bitcoin Miner Core Scientific Says It May Seek Bankruptcy</i></a>:<br /><br />"Core Scientific Inc., one of the world’s largest miners of Bitcoin, warned that it may run out of cash by the end of the year and could seek relief through bankruptcy protection.<br />...<br />Core Scientific held 24 Bitcoins and approximately $26.6 million in cash as of Thursday. That’s compared with 1,051 Bitcoins and about $29.5 million in cash as of September, the company said in the filing.<br /><br />The shares, which traded as much as $14.32 late last year, closed at 22 cents. they’ve tumbled 98% since the start of the year. <br /><br />Riot Blockchain Inc. fell 3% to $6.84, while Marathon Digital Holdings Inc. dropped 1% to $13.65. The companies are down about 69% and 58% this year, respectively."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-57098164201616099022022-10-19T13:49:50.322-07:002022-10-19T13:49:50.322-07:00Bitcoin Miners Pan for Cash as Profits Dry Up and ...<a href="https://www.bloomberg.com/news/articles/2022-10-19/bitcoin-miners-pan-for-cash-as-profits-dry-up-and-crypto-markets-slump" rel="nofollow"><i>Bitcoin Miners Pan for Cash as Profits Dry Up and Crypto Markets Slump</i></a> by David Pan documents miners' struggles to stay afloat:<br /><br />"Bitcoin mining companies are increasingly opting to sell equity, resorting to one of their least attractive options to raise money as profits dry up and higher interest rates makes borrowing more expensive.<br /><br />Core Scientific Inc., one of the largest US publicly traded Bitcoin miners, entered into a $100 million common stock purchase agreement with B. Riley Principal Capital II in July. Australian miner Iris Energy Ltd. said in September that it agreed to sell up to $100 million in equity to the same investment bank. London-based Argo Blockchain PLC, earlier this month, decided to issue stock at a discount to an unnamed investor for $27 million. <br /><br />Bitcoin miners have been pummeled by low Bitcoin prices, soaring energy costs and steep competition in the industry."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-64976461071930096932022-10-04T06:56:16.748-07:002022-10-04T06:56:16.748-07:00Naureen Malik reports that Texas Crypto Boom Slows...Naureen Malik reports that <a href="https://www.bloomberg.com/news/articles/2022-10-03/texas-crypto-boom-slows-as-double-compression-hinders-miners?srnd=premium" rel="nofollow"><i>Texas Crypto Boom Slows as ‘Double Compression’ Hinders Miners</i></a>:<br /><br />"The growth in Texas crypto-mining capacity will be stunted as Russia’s war on Ukraine drives up global energy prices and Bitcoin prices languish, according to an industry group.<br /><br />Mining capacity in the Lone Star State will increase by 2 gigawatts to 3.5 GW by the first quarter of 2024, rather than the former forecast of up to 5 GW, said Lee Bratcher, president of the Texas Blockchain Council. <br /><br />The “double compression effect” of higher electricity prices and declining cryptocurrency values means it’ll take longer to bring online the huge queue of mining projects set to connect to the state grid, Bratcher said at a conference on Monday."<br /><br />Note also:<br /><br />"In recent months, power demand soared to all-time highs almost a dozen times, prompting the Electric Reliability Council of Texas to urge businesses and households to curtail usage to avoid shortages. Miners have argued that they are super sensitive to power costs and voluntarily curtail operations to aid the state’s grid."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-63055963648419211652022-09-29T18:19:47.153-07:002022-09-29T18:19:47.153-07:00Nicholas Weaver demolishes Celcius' laughable ...Nicholas Weaver demolishes Celcius' laughable plan to mine its way out of bankruptcy in an <a href="https://cases.stretto.com/public/x191/11749/PLEADINGS/1174908252280000000073.pdf" rel="nofollow">amicus letter to the court</a>:<br /><br />"Cryptocurrency mining overall is a marginal business and Celsius has already shown they are not (and probably can not be) a viable participant in that space. Every day Celsius is allowed to pretend that their mining business is viable is another day of destroyed creditor value."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-48483614290938233522022-09-22T16:09:13.048-07:002022-09-22T16:09:13.048-07:00The balance sheet issues Paul Butler described are...The balance sheet issues Paul Butler described are catching up with the miners. Molly White reports that <a href="https://web3isgoinggreat.com/?id=compute-north-one-of-the-largest-crypto-mining-datacenters-files-for-bankruptcy" rel="nofollow"><i>Compute North, one of the largest crypto mining datacenters, files for bankruptcy</i></a>:<br /><br />"Compute North has filed for Chapter 11 bankruptcy, in what may be a blow to the crypto mining industry. Compute North is a major datacenter provider, and have deals with crypto mining companies including Marathon Digital, Compass Mining, and others. Compute North had just raised $385 million in February through a Series C equity round and debt financing."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-50520645647104850992022-08-17T07:28:29.990-07:002022-08-17T07:28:29.990-07:00David Pan reports that Largest Bitcoin Miners Lost...David Pan reports that <a href="https://www.bloomberg.com/news/articles/2022-08-16/largest-bitcoin-miners-lost-over-1-billion-during-crypto-crash" rel="nofollow"><i>Largest Bitcoin Miners Lost Over $1 Billion During Crypto Crash</i></a>:<br /><br />"Core Scientific Inc., Marathon Digital Holdings Inc. and Riot Blockchain Inc. posted net losses of $862 million, $192 million and $366 million, respectively, in the three months ended June 30, recent quarterly earnings reports show. Other significant miners such as Bitfarms Ltd. and Greenidge Generation Holdings Inc., which reported results Monday, were also forced to write down the value of their holdings in the wake of the almost 60% drop in the price of Bitcoin during the quarter."<br /><br />And:<br /><br />"Top public miners sold 14,600 coins in June whereas they produced 3,900, Mellerud said. Core Scientific sold nearly 80% of its coins to cover operational costs and fund expansion in June. Bitfarms sold nearly half of its holdings to pay down a $100 million loan in the same month."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-4099368682728189592022-08-16T08:31:49.729-07:002022-08-16T08:31:49.729-07:00D. Andrew Owens testified to the Arkansas Public S...D. Andrew Owens <a href="http://www.apscservices.info/pdf/22/22-032-TF_16_1.pdf" rel="nofollow">testified to the Arkansas Public Service Commission</a> and highlighted not just the environmental problems of Proof-of-Work mining, but also the credit risk they pose to the utilities that supply them with power:<br /><br />"First, unlike data centers, which similarly involve significant electrical load, Crypto miners do not have to invest significant capital in state-of-the-art facilities because they are able to place their equipment in shipping container “pods”, which allow them to locate almost anywhere, typically close to an electric utility’s substation. These portable pods allow Crypto miners to relocate easily and quickly if economic conditions change, and as described below they do so frequently and without notice. As an emerging industry, Crypto miners often do not have credit history that demonstrates their financial viability for the types of significant infrastructure investments necessary to serve them."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-32731976062586192562022-08-12T10:56:08.993-07:002022-08-12T10:56:08.993-07:00US miner Marathon Digital Assets published their 1...US miner Marathon Digital Assets published their <a href="https://ir.marathondh.com/sec-filings" rel="nofollow">10-Q</a> for the 3 and 6 months to June 30, and it is dire. In the last quarter their revenues were $24.9M. Their cost to generate these revenues was $16.7M <i>plus</i> $24.7M in depreciation and amortization, for a total of $41.4M. So just on raw cost they lost $16.5M. Then they had to pay "general and administrative" expenses of $12.6M, and tax of $9.9M making the loss on running a continuing business $39M.<br /><br />But there's more. Their losses on HODL-ing cryptocurrency totaled $207.3M, partially offset by selling $58.2M-worth of mining rigs. The bottom line is that they lost $191.6M in the quarter.<br /><br />Results like these from miners, and the fact that the hash rate has recently a significant drop, explains why this paragraph from <a href="https://www.bloomberg.com/news/articles/2022-08-11/crypto-lender-tied-to-chinese-rig-giant-throws-miners-a-lifeline?srnd=premium" rel="nofollow">David Pan's article</a> is important:<br /><br />"To alleviate some of the pressure, Antalpha said some of its loans would not require margin calls and it would let miners delay payments to Bitmain for mining machines by allowing miners to use purchased rigs as collateral."<br /><br />Bitmain is making loans that can't be margin-called and are secured against collateral that depreciates to zero over about 15 months! Bitmain is clearly scared; these loans will default unless Bitcoin heads moon-wards in a big way so miners start making money again.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-52267890585277482712022-08-11T14:27:49.661-07:002022-08-11T14:27:49.661-07:00Evidence of the depth of miner's financial pro...Evidence of the depth of miner's financial problems comes from David Pan in <a href="https://www.bloomberg.com/news/articles/2022-08-11/crypto-lender-tied-to-chinese-rig-giant-throws-miners-a-lifeline?srnd=premium" rel="nofollow"><i>Crypto Lender Tied to Chinese Rig Giant Throws Miners a Lifeline</i></a>:<br /><br />"Chinese Bitcoin mining rig giant Bitmain Technologies Ltd. has been selling machines to miners for about nine years. Now it’s helping to keep them afloat during the cryptocurrency market downturn through its ties with industry financier Antalpha.<br /><br />Bitmain and its Antpool mining spinoff are working with Singapore-based Antalpha to offer low-interest loans to miners to help them reduce borrowing costs and repay nearly $4 billion in loans backed by equipment which have fallen in value along with the price of Bitcoin since it peaked in November.<br />...<br />To alleviate some of the pressure, Antalpha said some of its loans would not require margin calls and it would let miners delay payments to Bitmain for mining machines by allowing miners to use purchased rigs as collateral."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-11527667388962055952022-08-04T14:07:17.412-07:002022-08-04T14:07:17.412-07:00Bitcoin Miner Made Millions in Credits by Shutting...<a href="https://www.bloomberg.com/news/articles/2022-08-03/bitcoin-miner-made-millions-by-shutting-rigs-during-texas-heat?srnd=premium" rel="nofollow"><i>Bitcoin Miner Made Millions in Credits by Shutting Rigs During Texas Heat</i></a> by David Pan shows how public-spirited the Bitcoin miners of Texas are:<br /><br />"Riot Blockchain Inc. earned about $9.5 million in credits last month from shutting down its Bitcoin mining rigs at a Texas facility while the region weathered a historic heat wave. <br /><br />The amount will be credited against the company’s power usage. The value of the credit is equal to around 439 Bitcoin. Riot also mined 318 coins during the month, according to the company’s monthly production and operations update.<br />...<br />While the power crunch sent electricity prices soaring and made Bitcoin mining operations unprofitable, some large-scale miners such as Riot were able to sell electricity purchased earlier at a lower price back to the grid with a premium."<br /><br />Not merely were Texas consumers' "electricity prices soaring" they were also having to pay Bitcoin miners to not mine Bitcoin - a win-win situation!<br /><br />But wait, there's more. The next day, David Pan reported that <a href="https://www.bloomberg.com/news/articles/2022-08-04/bitcoin-gains-spur-miners-to-turn-on-rigs-in-midst-of-heat-wave?srnd=premium" rel="nofollow"><i>Bitcoin Gains Spur Miners to Turn On Rigs in Midst of Heat Wave</i></a>:<br /><br />"A rise in the price of Bitcoin has prompted some miners of the cryptocurrency to switch on more rigs over the last two weeks even with much of the US still caught in a heat wave that boosted demand for electricity. <br />...<br />While many Bitcoin miners shuttered operations as electricity prices soared amid the heat wave, the rebound in Bitcoin prices over the period boosted mining revenue and prompted more miners to turn back on their machines."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-47825154362405879672022-08-04T13:58:01.651-07:002022-08-04T13:58:01.651-07:00Amy Castor and David Gerard's Bitcoin mining i...Amy Castor and David Gerard's <a href="https://amycastor.com/2022/08/04/bitcoin-mining-in-the-crypto-crash-the-mining-companies-creative-accounting/" rel="nofollow"><i>Bitcoin mining in the crypto crash — the mining companies’ creative accounting</i></a> is a comprehensive overview of the economics of mining in the "crypto winter":<br /><br />"Bitcoin mining is a highly lucrative business as long as the price of bitcoin keeps going up — and as long as investors believe it will keep going up.<br /><br />When the price crashes — and the price of bitcoin has halved since the start of the year — crypto miners face margin calls, they have to dump their bitcoins, and reality comes knocking."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.com