The increase in the global energy prices and drop in bitcoin prices have caused a “Challenging Earnings environment” for Bitcoin Miner Greenidge Generation.
One of the popular Bitcoin miners, GEE (Greenidge Generation Holdings), has disclosed its second-quarter revenue valued at around USD 31.3 Million. This is less than what analysts at FactSet had predicted, approximately around USD 34 Million).
Shares Of Bitcoin Miner Greenidge Generation Decline As Revenues Fall Short Of Expectations
Also, the company had reported a total loss of USD 107.9 MIllion, which included a 98.2 Million USD loss in various other items.
The Share cost went down 9.5 percent to USD 4.21 on Monday during trading hours and followed a rise of 12 percent early that day. According to the price chart, the value has been down by 71 Percent since last year.
Bitcoin Mining By Greenidge Mining Company
Greenidge‘s official report said they produced approximately 621 Bitcoin during Q2 this year. It is roughly 50 percent more than they had in the Second Quarter of 2021, i.e., 315 bitcoin. According to the official statistics by coindesk, there are approximately 27500 Miners as of June 30, 2022, with about 2.5 EH/s.
During the press release by Greenidge, the CEO Jeff Kirt said that bitcoin prices are nearly down by 60 percent, amalgamating with the hikes in global energy prices, causing a challenging environment for earnings.
With the rapid change in the economics of bitcoin mining, they are forced to rework their strategy to prioritize capital preservation and liquidity over huge growth. Also, Kert had mentioned that they would also focus on operational performance.
Jeff Kirt said Greenidge would put some pause on developing the new bitcoin mining sites and would plan much on existing mining sites in New York and South Carolina.
Greenidge Q2 Performance
In Q2 2022, Greenidge had planned to upgrade their mining devices by replacing the older ones with the new ones to enhance the mining capacity and make it a more efficient miner in its order book. Also, they expect to continue this for the second half of 2022. They might consider selling some assets, such as surplus mining infrastructure, to enhance their liquidity position.
Greenidge expects to build at least a mining capacity of 3.6 EH/s by Quarter 1 of 2023. This would help them maintain a certain level until the market conditions become attractive for more aggressive growth.
The forecasted cost to procure the infrastructure and any contractor services to build their infrastructure would be nearly USD 7.5 Million. Soon they will also upgrade the electrical service at one of the sites in Spartanburg, SC.
Bitcoin Prices At USD 24k
Various analysts believe that BTC would stabilize at a much lower price, with some estimates between USD 24K and USD 27K. Based on the technical charts, the average realized price among traders is USD 24.3k. Historically, there have been instances where the realized prices have been quite lower than this.