Hive Blockchain has been one of the first significant crypto mining companies to list on a major public exchange. Being able to tap into public markets has helped it become more competitive in the industry and attract new investors.
While most of the major miners have been hit hard by this crypto winter, Hive has managed to weather it with relative ease. This may be largely due to its superior financial flexibility.
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Revenues
The report core scientific 545m blockchain hive generates a significant amount of revenue, and it does so in a way that is both environmentally sustainable and profitable. The company’s revenues are derived from mining of digital currencies such as Bitcoin. In addition, the company also provides hosting services for miners.
Core Scientific is the largest public mining company in terms of revenue and hash rate, with 8.3 exahashes per second (Eh/s) at its current market cap. It mined a total of 5,769 BTC in 2021, earning $545 million in revenue from that activity.
However, the company recently faced a number of problems, including a court ruling that shut down 37,000 machines associated with Celsius Mining, its largest customer, which is undergoing bankruptcy proceedings. Additionally, the company recently reported a decrease in Bitcoin prices and is expected to lose cashflow this year.
In order to compensate for these financial challenges, Core Scientific has a strong focus on green energy and environmental sustainability. The company plans to use over 67% renewable electricity by the end of 2022, and it has already committed to using carbon offset credits.
This is important as the mining industry continues to expand and become more complex. The increased computational difficulty means that more and more mining facilities are being required, which puts strain on the electric grid. In turn, this has led to power curtailments across the industry.
As a result, the company has had to reduce its capacity by 50%, despite operating at over 3.5 EH/s for most of 2021. The company expects to increase its capacity in the future as it acquires new equipment and deploys new mining rigs.
Overall, the company generated $44.2 million in revenue in June. This was primarily due to an increase in production of digital currencies from its Canadian data centers and expansions at its European facilities.
While these increases have put the company in a position to grow its revenues, it is not necessarily a good sign for shareholders that are worried about the future of the company. It is also likely that the company will continue to experience cash flow issues as it grows its operations.
Net income
Using advanced equipment and a lot of electricity, cryptocurrency miners run data centers that crunch math equations to validate transactions and create new tokens. It’s a process called proof-of-work mining, and while it’s not as profitable as it once was, miners are still here to stay.
The crypto mining industry is a competitive one, with large public companies like Core Scientific leading the pack in terms of revenue and hash rate. This is a growing sector that could see massive growth in the coming years.
In a recent filing, Core Scientific reported net income of 545 million in 2021. This makes them the world’s largest publicly traded crypto mining company.
Core Scientific operates the first ever commercial blockchain data center in Texas, and is building a second in Oklahoma. Its proprietary Minder fleet management software combines its hosting expertise with data analytics to deliver maximum uptime, alerting, monitoring and management of all miners in its network.
While the crypto mining industry is a thriving business, it’s also subject to many risks. A year of plunging cryptocurrency prices and rising energy costs is making it difficult for miners to make money.
To help reduce their operational costs, some miners use cloud mining services. These services allow them to lease a portion of the mining hardware that can be used to mine a variety of coins. This is a great way to get exposure to the crypto mining industry without having to own the equipment, and it can help them avoid capital losses.
Other companies offer specialized hardware that helps mining processes be more efficient. These are known as “rigs” and they often have a long lifecycle, assuming they are properly maintained.
However, the biggest difference between a rig and an actual miner is that the latter requires expensive hardware and lots of electricity. The former uses less power, and a slew of smart software can help keep these costs in check.
While the crypto mining industry is a volatile business, it’s still a highly lucrative one for companies that can scale their operations effectively. In our opinion, HIVE has the best balance sheet among its peers, and is well-positioned to ride out the rough waters that are likely ahead.
Earnings per share
Despite a severe crypto winter, many publicly-traded miners managed to boost their Bitcoin (BTC) production numbers. Hive Blockchain Technologies (HIVE), Core Scientific (CORZ), Marathon Digital (MARA) and Argo Blockchain (ARB) all reported BTC production growth in December.
However, most of them are still struggling with a lack of liquidity in the market. This could lead to some of them collapsing or, at the very least, experiencing a significant decline in share price.
The biggest player is Core Scientific, which went public through a special purpose acquisition company (SPAC) merger in January this year. The company is the largest publicly traded mining company by hash rate, leading all others in both revenue and eps per share.
According to the most recent quarterly report from Core Scientific, it mined 545m BTC in 2021 and earned $544.5 million in revenue. That was a significant jump from last year’s figures, and it beat analyst estimates by a considerable margin.
Core Scientific also had the highest eps per share for its fiscal 2021 results, at 32 cents per share. That figure may not seem like a lot, but it’s well above the consensus estimate of 44 cents per share, and is a sign that the company has improved its business model.
Another major highlight was the company’s utilisation of new technology to improve efficiency. The company’s new generation of ASIC miners, which use a lot less energy than their predecessors, enables it to produce more coins at lower costs.
Similarly, Hive has also installed the latest in GPU technology at its facilities. This allows it to mine both existing and new cryptocurrencies. The company’s state-of-the-art green energy-powered data centres are located in Canada, Sweden and Iceland and use solar power, natural gas and geothermal energy.
The company also has a strong balance sheet with a positive tangible book value of 5.34 per share, indicating that it is in a good position to withstand the upcoming liquidity crisis. As a result, investors should expect to see HIVE continue to grow in the near term as it expands its operations and infrastructure.
Cash flow
Core Scientific, one of the largest public miners, is filing for bankruptcy after a year of plunging bitcoin prices and rising energy costs. The company specializes in powering data centers packed with highly specialized computers that mine proof-of-work cryptocurrencies like bitcoin.
Its shares have tumbled 19% this year, and it is struggling to find ways to raise cash in an industry that has become increasingly difficult to keep afloat. The company filed for bankruptcy in December with estimated liabilities of between $1 billion and $10 billion, as well as around 1,000 to 5,000 creditors.
As of October, the firm had $32.2 million in cash and 62 BTC in its reserves. However, it warned earlier this month that it may not be able to pay its creditors by the end of the year, and would not be making payments on its loans in late October.
In a court filing last week, Core Scientific said it had hired law firm Weil Gotshal & Manges and financial advisor PJT Partners to look for alternatives to improve its liquidity. It has also taken steps to decrease operating costs, reduce or delay construction expenses, and increase hosting revenue.
The firm also plans to look for additional financing to allow it to continue operations past November 2023. It has sought to replace a debtor-in-possession (DIP) facility that was set to expire in February with a loan from investment bank B. Riley, which the company says will provide it with “up to 15 months of runway and significant flexibility” while the bankruptcy process continues.
This new financing is in addition to a $70 million loan from BlockFi, the parent company of crypto exchange FTX. The loan is based on economic terms that are better than those offered by its original DIP facility, the company said in a filing.
As a result, the company says it is now in a much better position to negotiate with creditors and restructure its debt. While the company is in the middle of a bankruptcy process, it plans to avoid liquidating assets and to continue mining throughout it.
