Texas shutdown for bitcoin mining giant

A quarter in minor mode – the mining cryptocurrency is a fledgling industry with significant exposure to the price of its flagship asset: the Bitcoin. When it bursts the ceiling, manufacturers rub their hands and arouse greed. When the market declines or declines, the Cassandres say “it was well said” and the shareholders demand accountability. Such is life in this new kind of business where theecologyI’economy and the Politics share the media light. Head to Dresden, in the northeast of the United States in the State of New York to see how Greenidge Generation handle the situation.

The economic context is very complicated for bitcoin mining

At the time of doing the accounts for the second quarter, the CEO Jeff Kirt finger point two factors determinants for his business: the course of the Bitcoin and the price ofenergy. Indeed, to produce the 621 btc this quarter, the company rotated its 27,500 minors at full speed. All developing 2.5 PE/s of combined capacity. In mining, we use the exahash per second as a unit of measurement. Needless to say that the electricity bill must be salty!

Be aware though that Greenidge Generation is one of the only companies in the world to mine 100% carbon neutral btc. All while combining technology state-of-the-art and a purchasing policy of carbon credit. That being said, the course of the price of energy – even green – reached new heights this year. which represents a spent unforeseen which obviously burdens the balance sheet of the company. Add in a plummeting Bitcoin price since last year, and you have all the makings of a balance sheet catastrophic for the company. Here is what the CEO has to say:

“The roughly 60% drop in the price of bitcoin during the second quarter, coupled with the surge in global energy prices clearly presents a challenging earnings environment. »

Industrial mining faces both crypto and energy prices

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The company Greenidge Generation reduces the airfoil of its investments

A challenging earnings environment“, sweet euphemism for a company that shows a loss of 107.9 million of dollars ! And the stock price went down 71% since the beginning of the year. Something to panic investors and shareholders, worried about seeing the market falter. But the mining company sought at the same time to reassure its people by projecting itself into the future. And this in a reasonable way.

It is to slow down new investments like that of Texas to focus on existing units like North Carolina and New York. And the Goals of production displayed are ambitious! We talk about reaching 3.6 PE/s of mining capacity by the first quarter of 2023. Paradoxically, all of the company’s production lights are green with 10.7% Bitcoin additionally mined in the second quarter – i.e. 621 BTC. But at the same time, revenue was down 17% to $31.3 million from the first quarter. Which brings Jeff Kirt to conclude in these terms:

“The sudden shift in the mining economy has prompted us to refocus our strategy to carefully prioritize liquidity and capital preservation over aggressive growth. While maintaining our constant focus on operational performance. »

Looking forward to “attractive market conditions to revive growth », Greenidge Generation is hunkering down and focusing on its production capacity. And at the same time tries to reassure its investors about the medium-term future of the industry. Hoping that adverse climatic conditions do not add to an unfavorable economic situation.

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