- Following Ethereum’s swap from proof of labor to proof of stake, BIT Mining has transitioned from Ethereum mining to relying closely on Dogecoin and Litecoin for revenue.
- Analyst Mike Fay raises considerations over BIT Mining’s choice to promote one-third of its Ethereum holdings and considerably improve its Dogecoin treasury.
In a shocking twist within the crypto-sphere, BIT Mining (BTCM), as soon as a number one Ethereum miner, has altered its crypto treasury technique drastically. Following Ethereum’s monumental transition from proof of labor to proof of stake, the Ohio-based miner, listed on the New York Inventory Alternate, has shifted its focus to Dogecoin and Litecoin.
The corporate reported a income of $72.9 million for the final quarter, marking a close to 20% improve from the earlier quarter however witnessing a 75% plunge yr on yr. BIT Mining’s income is primarily cut up throughout three sectors: mining cryptocurrencies independently, mining as a part of a pool, and internet hosting companies inside its information facilities.
Within the earlier quarter, BIT Mining’s income from its mining pool reached $60 million, accounting for 82% of its whole revenue. In the meantime, self-mining and information facilities every contributed roughly $6 million.
Previous to Ethereum’s transformation in September final yr, often called the Merge, Ethereum mining made up over three-quarters of BIT Mining’s self-mining income. This pivotal shift in Ethereum’s consensus mechanism, which eradicated the need for crypto miners, predictably plunged BIT Mining’s self-mining revenue from $7.1 million in Q3 2022 to a mere $1.9 million within the subsequent interval.
As Ethereum mining waned, the agency garnered $6.2 million from mining cryptocurrencies in Q1 2023, predominantly Litecoin (LTC) and Dogecoin (DOGE), publish the shutdown of sure Bitcoin mining rigs. Notably, Dogecoin and Litecoin witnessed skyrocketing hash charges across the time of the Merge, regardless of their differing hashing algorithms from Ethereum.
Amid these modifications, Analyst Mike Fay (through Searching for Alpha) has expressed bafflement over BIT Mining’s choice to unload one-third of its Ethereum holdings, amounting to 1,602 ETH ($3 million at present costs). In distinction, the agency boosted its Dogecoin holdings by 62% quarter on quarter, escalating from 42.8 million DOGE ($3.1 million) to 69.5 million DOGE ($5 million). Its Bitcoin holdings remained regular at 289 BTC, value $7.8 million.
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With this shift, BIT Mining’s crypto treasury was virtually 28% Dogecoin on the finish of Q1 2023. The corporate’s whole property stood at $40.2 million, with liabilities amounting to $39 million, together with lease obligations.
Fay argued towards BIT Mining’s technique, questioning why the agency would maintain onto “meme cash” as a substitute of leveraging Ethereum’s staking potential at nearly no price. Regardless of rising Ethereum costs, BIT Mining’s choice has sparked hypothesis and criticism, additional fueling the controversy on efficient digital asset administration methods.
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