1. Homepage
  2. Equities
  3. Canada
  4. Toronto Stock Exchange
  5. Bitfarms Ltd.
  6. News
  7. Summary
    BITF   CA09173B1076

BITFARMS LTD.

(BITF)
  Report
Delayed Toronto Stock Exchange  -  04:00 2022-08-05 pm EDT
2.090 CAD   +5.56%
08/01BITFARMS : MATERIAL CHANGE REPORT - Form 6-K
PU
08/01Bitfarms' July Bitcoin Production Gains
MT
08/01Bitfarms Provides July 2022 Production and Mining Operations Update
GL
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Bitcoin miners sell their holdings amid crypto winter's chill

06/27/2022 | 12:57pm EDT
FILE PHOTO: A small toy figure and representations of the virtual currency bitcoin stand on a motherboard in this picture illustration

(Reuters) - Bitcoin miners have been forced to tap into their cryptocurrency stashes as a plunge in prices, rising energy costs and increased competition bite into profitability.

The number of coins miners are sending to crypto exchanges has been steadily climbing since June 7, researchers at MacroHive noted, in a sign that "miners have been increasingly liquidating their coins on exchanges."

Several publicly listed bitcoin miners collectively sold more than 100% of their entire output
in May as the value of bitcoin tumbled 45%, an analysis by Arcane Research https://tmsnrt.rs/3nhYdHA found.

"The plummeting profitability of mining forced these miners to increase their selling rate to more than 100% of their output in May. The conditions have worsened in June, meaning they are likely selling even more," said Arcane analyst Jaran Mellerud.

Bitcoin sales by public miners https://fingfx.thomsonreuters.com/gfx/mkt/gkplgejyyvb/bitcoin%20mining.JPG

Bitcoin miners, who run networks of computers to earn tokens by validating transactions on the blockchain, are typically staunch crypto "HODLers" and collectively own around 800,000 bitcoins, according to CoinMetrics data.

The crypto mining space rapidly expanded in 2021 as bitcoin more than quadrupled in value, but this growth has further pressured margins as the process is designed to grow more difficult as the number of miners increases.

"Over the past six months, hash rate and mining difficulty have increased while the price of bitcoin has dropped. These are both negatives for existing miners as both work to compress margins," said Joe Burnett, analyst at bitcoin mining firm Blockware Solutions.

High energy prices are also hitting miners, which by some estimates use more electricity than the Philippines, according to the Cambridge Bitcoin Electricity Consumption Index.

"If you're not at a very low-cost electricity area at this point, you've got to shut down," noted Chris Brendler, senior research analyst at D.A. Davidson.

Bitfarms, Riot Blockchain and Core Scientific are among companies that announced sales, with Bitfarms' chief executive officer saying the company is "no longer HODLing daily bitcoin production."

Shares of publicly listed miners have been battered even more than bitcoin, with the Valkyrie Bitcoin Miners ETF falling 59% this quarter compared to 53% drop for bitcoin.

Some miners, including Bitfarms, are using proceeds to negotiate financing agreements to fund operations and make payments on expensive mining equipment.

If miners have already paid two-thirds or even 70% of the price of these millions of dollars in machines, they wouldn't want to miss the final installments, which makes them desperate for financing, Brendler said.


Given their significant bitcoin holdings https://tmsnrt.rs/3xUJesg, some analysts point to miner sales as another factor weighing on bitcoin prices.

Valuations and holdings of public bitcoin miners

LIGHT AT THE END OF THE TUNNEL?

Miners using older and more energy-intensive machines, and without the balance sheet and access to financing of publicly listed players are already struggling.

Bitcoin's mining difficulty decreased 2.35% this week, Glassnode data showed, indicating the network had adjusted after some miners turned off their rigs.

This takes some pressure off those that have not given up.

"Bitcoin mining is a zero-sum game. If you can continue running when others cannot that means you have a larger share of the pie," said Charlie Schumacher, spokesperson for the largest publicly listed miner Marathon Digital Holdings Inc.

Marathon has not sold bitcoin since October 2020, he added.

"Bitcoin bottoms have been marked at the end of miner capitulation, that could be a sign that the miners that can survive this capitulation have a light at the end of the tunnel," Burnett said.

(Reporting by Medha Singh and Lisa Mattackal in Bengaluru; Editing by Lisa Shumaker)

By Lisa Pauline Mattackal and Medha Singh


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
BITCOIN (BTC/EUR) -1.57% 22540.4 End-of-day quote.-46.37%
BITCOIN (BTC/USD) -1.63% 22940.1 End-of-day quote.-51.95%
BITFARMS LTD. 5.56% 2.09 Delayed Quote.-67.24%
CORE SCIENTIFIC, INC. 10.65% 2.91 Delayed Quote.-73.42%
MARATHON DIGITAL HOLDINGS, INC. 5.59% 14.17 Delayed Quote.-56.88%
RIOT BLOCKCHAIN, INC. 1.10% 8.27 Delayed Quote.-62.96%
All news about BITFARMS LTD.
08/01BITFARMS : MATERIAL CHANGE REPORT - Form 6-K
PU
08/01Bitfarms' July Bitcoin Production Gains
MT
08/01Bitfarms Provides July 2022 Production and Mining Operations Update
GL
08/01Bitfarms Provides July 2022 Production and Mining Operations Update
AQ
08/01Bitfarms Provides July 2022 Production and Mining Operations Update
CI
07/29BITFARMS : to Report Second Quarter 2022 Financial Results on Monday, August 15, 2022 - Fo..
PU
07/29Bitfarms to Report Second Quarter 2022 Financial Results on Monday, August 15, 2022
GL
07/29Bitfarms to Report Second Quarter 2022 Financial Results on Monday, August 15, 2022
AQ
07/28Bitfarms Says Completes Phase 2 at Bunker Location in Quebec
MT
07/28Bitfarms Completes Phase 2 at Its Bunker Location
GL
More news
Analyst Recommendations on BITFARMS LTD.
More recommendations
Financials (USD)
Sales 2022 213 M - -
Net income 2022 - - -
Net Debt 2022 - - -
P/E ratio 2022 -
Yield 2022 -
Capitalization 328 M 328 M -
Capi. / Sales 2022 1,54x
EV / Sales 2023
Nbr of Employees 106
Free-Float 86,2%
Chart BITFARMS LTD.
Duration : Period :
Bitfarms Ltd. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends BITFARMS LTD.
Short TermMid-TermLong Term
TrendsBullishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 1
Last Close Price 2,09
Average target price
Spread / Average Target -
EPS Revisions
Managers and Directors
Emiliano Joel Grodzki Director & Chief Strategy Officer
L. Geoffrey Morphy President & Chief Operating Officer
Jeffrey P. Lucas Chief Financial Officer
Nicolas Bonta Executive Chairman & Chief Development Officer
Brian M. Howlett Lead Independent Director
Sector and Competitors
1st jan.Capi. (M$)
BITFARMS LTD.-67.24%328
MARATHON DIGITAL HOLDINGS, INC.-56.88%1 506
RIOT BLOCKCHAIN, INC.-62.96%1 119
ARGO BLOCKCHAIN PLC-59.10%230
CLEANSPARK, INC.-51.05%192
GREENIDGE GENERATION HOLDINGS INC.-78.75%143