Bitfarms, a prominent Bitcoin mining company, experienced a significant revenue decline in May, the first full month after the Bitcoin halving event in April. The company’s crypto mining revenue fell by 42%, highlighting the financial challenges miners face post-halving.
Revenue and Production Decline
In April, Bitfarms produced 263 Bitcoin (BTC), amounting to $18.1 million. However, in May, production dropped to 156 Bitcoin, worth $10.7 million. Bitfarms attributed this decline to the new “post-halving economics,” as the Bitcoin mining subsidy was reduced from 6.25 BTC to 3.125 BTC on April 20.
Challenges in Production
The average Bitcoin earned per unit of computational power also fell, dropping 45% from 44 exahashes per second (EH/s) to 24 EH/s. Besides the halving effect, Bitfarms blamed “unusually cold temperatures” at its Rio Cuarto facility in Argentina. This adverse weather, reportedly the worst in 44 years, forced the company to curtail operations for eight days.
Mitigation Efforts
Despite these challenges, Bitfarms noted that the damage in Argentina was partially mitigated by a 4.2% decrease in network difficulty compared to April. Additionally, Bitfarms secured an extra 100 megawatts at its Yguazu site in Paraguay through a power purchase agreement with Paraguay’s state-owned Administración Nacional de Electricidad. This amendment will double the site’s capacity to 200 megawatts, with the potential to add 6 EH/s upon installment in 2025.
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Future Prospects
Bitfarms’ current installed hash rate stands at 9.5 EH/s, positioning it as the fifth largest behind Marathon Digital, Core Scientific, CleanSpark, and Riot Platforms. The company also anticipates an increase in hash rate to 12 EH/s once an additional 16,200 Bitcoin miners are installed. Bitfarms operates mining facilities in the U.S. and Canada as well.
Market Response and Stock Performance
Despite the 42% drop in Bitcoin production, Bitfarms’ stock (BITF) rose by 2.92% on the Nasdaq on June 3. However, BITF is still down 15.9% in 2024, following a strong 2023 where the stock surged 588%. Recently, Bitfarms rejected a $950 million acquisition proposal from Riot Platforms.
