A publicly listed Bitcoin (BTC) miner from Wall Street, BitFuFu Inc. (NASDAQ: FUFU), has reported
a significant increase in crypto mining costs and a sharp decline in net income
for the second quarter of 2024, despite strong revenue growth.
Bitcoin Miner BitFuFu
Reports Surging Costs, Lower Profits in Q2
The
company’s cost to mine one Bitcoin from self-mining operations soared to
$51,887 in Q2 2024, up from $19,344 in the same period last year. This 168%
increase in mining costs comes as the cryptocurrency industry grapples with
higher energy prices and increased mining difficulty following the Bitcoin
halving event in April.
Despite a
69.7% year-over-year (YoY) increase in total revenue to $129.4 million,
BitFuFu’s net income fell to $1.3 million in Q2 2024, compared to $5.1 million
in the same quarter of 2023. The company attributed this decline partly to a
non-cash unrealized fair value loss of $16.4 million on its Bitcoin holdings.
However, Calla
Zhao, BitFuFu’s Chief Financial Officer, claims that the company maintained a healthy balance sheet with a net cash position of $52.5 million, “which
provides a solid foundation to execute on our growth strategy.”
The
company’s Bitcoin production from self-mining operations decreased by 23.1% to
780 BTCs in Q2 2024, down from 1,014 BTCs in the same period last year. This
decline was primarily due to the increase in blockchain difficulty for Bitcoin
mining and the impact of the halving event.
Recently,
two other mining companies also published their financial data for Q2 2024. In
their case, however, the struggle with the negative effects of the halving
appears to be more successful. HIVE Digital increased its revenue by 37% and
TeraWulf by 130%.
Net profits
also rose, as both companies have decided to move towards supporting AI and
high-performance computing. According to VanEck analysis, an increasing number
of companies in the industry are doing this, eyeing a $38 billion opportunity.
Cloud-Mining Operations Up
Despite
these challenges, BitFuFu reported strong growth in its cloud-mining business,
with registered users increasing 86.8% YoY to 395,056.
“We saw a
substantial increase in our cloud-mining registered user base, surpassing
395,000 users as of June 30,” commented Leo Lu, Chairman and Chief Executive
Officer of BitFuFu. “This represents an 87% increase year-over-year and a 23%
rise sequentially from the first quarter of 2024.”
🌟 $FUFU‘s Q2 2024 Milestones! 📊Our hosting capacity jumped 39.6% YoY to 522 MW, and #mining capacity soared 62.5% YoY to 24.7 EH/s. With 395,056 users (+86.8% YoY) and revenue up 69.7% YoY to $129.4M, we’re leading the #BTC market!Details here! https://t.co/oig3qAY44x pic.twitter.com/xIy0U4SRl1
— BitFuFu (@BitFuFuOfficial) August 20, 2024
And
although the number of Bitcoins produced by clients using the cloud-mining
service also declined, reaching 1,272 BTC compared to 1,797 BTC in the same
period the previous year, it did not harm the overall revenue structure.
Revenue from cloud-mining solutions rose 66.8% to $77.0 million, accounting for
59.5% of total revenue.
“Cloud-mining
revenue contributed approximately 60% of BitFuFu’s second-quarter revenue. Our
cloud-mining business enables us to effectively lock in the price of Bitcoin,
serving as a hedge against Bitcoin price volatility,” Lu added.
BitFuFu has been listed on
Wall Street only since this year, executing plans announced back in 2022.
Although it is not among the top 5 miners on Nasdaq with a capitalization of
700 million dollars (falling about $1 billion short of the fifth, Core Scientific),
the company’s actions are definitely attracting investor attention.
This article was written by Damian Chmiel at www.financemagnates.com.
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