HIVE Blockchain Reports $90m Loss in Q4 2022 amid Lower Bitcoin Prices

by Damian Chmiel
  • The net loss came in at $90 million, rising from a $37 million loss reported in Q3.
  • HIVE tries to compensate for challenging market conditions by energy hedging.
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HIVE Blockchain Technologies Ltd. (TSX:HIVE), a publicly-listed crypto mining company, has published a quarterly report for the three-month period ended 31 December 2022, showing a significant decrease in digital currency production revenue of 51.6% year-over-year (YoY) to $14.1 million.

HIVE Reports Q4 Financials

According to Tuesday’s press release, Ethereum’s ‘The Merge’, prolonged cryptocurrency winter, rising mining difficulty and tumbling crypto prices were among the main reasons for the sharp yearly decrease in quarterly revenue.

HIVE was able to mine 787 BTC in the reported period, rising 13% YoY. In January, the publicly-listed miner showed an overall increase in Bitcoin production statistics for 2022 of 18% YoY to 4,752. However, the turbulences mentioned above cut the profit margins down effectively.

The crypto miner held $39 million in cryptocurrency assets at year-end. The company reported a significant increase in new Bitcoin production difficulty in the fourth quarter, growing 37% to $18,072 compared to $9,894 reported in the previous quarter.

The net result for the entire quarter translated to a sizable loss of $90 million, compared to the $37 million loss reported in the third quarter of the calendar year 2022. In the three months ending 30 September 2022, the company reported a 45% decrease in revenue, despite the higher BTC production.

“Strategically, we have not borrowed expensive debt against our mining equipment or pledged our Bitcoins for costly loans, thus our balance sheet remains healthy to weather this storm. We believe our low coupon fixed debt; attractive green renewable energy prices and high performing energy efficient ASIC and GPU chips will help us navigate through this crypto winter,” Frank Holmes, HIVE’s Executive Chairman, commented.

Watch the recent FMLS22 panel on reimagining the crypto market structure.

Gird Balancing to Help HIVE

According to a separate report from two weeks ago, HIVE was able to earn $180,000 from balancing the grid, expanding its revenues from direct Bitcoin mining. The income from the last month’s grid balancing equals the mined value of approximately 10 Bitcoins.

“Through hedging our energy contracts, selling power back to the grid, and optimizing our operating capacity to focus on maximum profit per KWHR, HIVE has realized profit from mining operations this quarter,” HIVE commented in the quarterly results press release.

Optimizing energy allocation allows HIVE to boost hashrate numbers or generate additional revenue by returning the resources to the grid.

Crypto Miners Closed a Strong Year

HIVE's yearly BTC production statistics coincide with similar numbers published by another publicly-listed crypto company, Bitfarms, which showed a 49,6% YoY increase in Bitcoin mining from 3,453 in 2021 to 5,167 in 2022.

However, the rising mining statistics failed to compensate for declines in the major asset prices, leading to a sharp drop in overall revenues. They slumped by 37.5% to $9.55 billion in 2022, which was $6 billion lower than in the record-breaking 2021.

HIVE Blockchain Technologies Ltd. (TSX:HIVE), a publicly-listed crypto mining company, has published a quarterly report for the three-month period ended 31 December 2022, showing a significant decrease in digital currency production revenue of 51.6% year-over-year (YoY) to $14.1 million.

HIVE Reports Q4 Financials

According to Tuesday’s press release, Ethereum’s ‘The Merge’, prolonged cryptocurrency winter, rising mining difficulty and tumbling crypto prices were among the main reasons for the sharp yearly decrease in quarterly revenue.

HIVE was able to mine 787 BTC in the reported period, rising 13% YoY. In January, the publicly-listed miner showed an overall increase in Bitcoin production statistics for 2022 of 18% YoY to 4,752. However, the turbulences mentioned above cut the profit margins down effectively.

The crypto miner held $39 million in cryptocurrency assets at year-end. The company reported a significant increase in new Bitcoin production difficulty in the fourth quarter, growing 37% to $18,072 compared to $9,894 reported in the previous quarter.

The net result for the entire quarter translated to a sizable loss of $90 million, compared to the $37 million loss reported in the third quarter of the calendar year 2022. In the three months ending 30 September 2022, the company reported a 45% decrease in revenue, despite the higher BTC production.

“Strategically, we have not borrowed expensive debt against our mining equipment or pledged our Bitcoins for costly loans, thus our balance sheet remains healthy to weather this storm. We believe our low coupon fixed debt; attractive green renewable energy prices and high performing energy efficient ASIC and GPU chips will help us navigate through this crypto winter,” Frank Holmes, HIVE’s Executive Chairman, commented.

Watch the recent FMLS22 panel on reimagining the crypto market structure.

Gird Balancing to Help HIVE

According to a separate report from two weeks ago, HIVE was able to earn $180,000 from balancing the grid, expanding its revenues from direct Bitcoin mining. The income from the last month’s grid balancing equals the mined value of approximately 10 Bitcoins.

“Through hedging our energy contracts, selling power back to the grid, and optimizing our operating capacity to focus on maximum profit per KWHR, HIVE has realized profit from mining operations this quarter,” HIVE commented in the quarterly results press release.

Optimizing energy allocation allows HIVE to boost hashrate numbers or generate additional revenue by returning the resources to the grid.

Crypto Miners Closed a Strong Year

HIVE's yearly BTC production statistics coincide with similar numbers published by another publicly-listed crypto company, Bitfarms, which showed a 49,6% YoY increase in Bitcoin mining from 3,453 in 2021 to 5,167 in 2022.

However, the rising mining statistics failed to compensate for declines in the major asset prices, leading to a sharp drop in overall revenues. They slumped by 37.5% to $9.55 billion in 2022, which was $6 billion lower than in the record-breaking 2021.

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