Riot Platforms Achieves Over 10,000 BTC Holdings Amid Production Challenges

Riot Platforms has announced that its Bitcoin production saw a decrease in August 2024, while still maintaining a positive outlook with plans to enhance its mining capabilities and reduce energy costs.

Currently, Riot Platforms holds more than 10,000 Bitcoin (BTC), marking a 37% increase compared to the same time last year. However, the company reported a 13% decline in its Bitcoin production for August compared to July.

Bitcoin mining companies are facing profitability issues primarily due to rising energy expenses and the recent halving of the Bitcoin rewards, which has reduced the mining reward from 6.25 BTC to 3.125 BTC per set of 210,000 blocks.

As a response to these challenges, miners are exploring avenues such as:

• Diversifying into data center operations
• Seeking more cost-effective energy solutions

Riot’s Production Declines with No Bitcoin Sales in August

In August 2024, Riot produced a total of 322 Bitcoin, down from 370 Bitcoin in July. This figure also shows a decline of roughly 3% compared to August 2023, when the company produced 333 Bitcoin. Unlike the previous year, where Riot sold 300 Bitcoin and generated significant proceeds, no sales occurred in August this year.

Jason Les, CEO of Riot, mentioned, “August is historically the hottest month of the year in Texas, leading to high demand on the ERCOT grid,” underscoring the operational challenges faced during this period.

Optimizing Energy Costs Amid Mining Difficulties

Riot has focused on optimizing its energy usage while providing additional power to the grid during peak demand periods. In August, this strategy resulted in power credits that brought the all-in power cost at the Rockdale facility to $20 per megawatt-hour (MWh).

Conversely, the Corsicana facility, which purchases energy at real-time spot prices, reported an all-in power cost of $39/MWh for the month.

Riot’s average operating hashrate for August was 14.5 exahashes per second (EH/s), reflecting a 7% decline from July but a remarkable 224% increase year-over-year.

A higher hashrate showcases the enhanced computing power necessary for transaction validation in cryptocurrency networks, reinforcing security by complicating potential compromises of the blockchain.

Moreover, Riot has commenced efforts to boost its hashrate through recently acquired facilities in Kentucky, aiming for a third-quarter target of 28 EH/s and a year-end target of 36 EH/s.

Expansion Plans in Progress

The company is currently advancing Phase 1 (400 MW) of its Corsicana Facility, with a final aim of achieving a total mining capacity of 1 gigawatt (1,000 MW). CEO Jason Les elaborated that substantial progress has been made on the 100 MW building at Corsicana, with full operational capacity expected by the end of September.

“We have made significant progress towards completing the development of our third 100 MW building at the Corsicana Facility, Building B1, and expect the deployment of miners within it to be concluded by the end of September,” Les stated.

Riot and Bitfarms Corporate Developments

Riot Platforms is the largest stakeholder in Bitfarms, holding a 19.9% share. The company has sent a letter to Bitfarms shareholders proposing significant changes to its board of directors. A shareholders’ meeting is scheduled for October 29, where Riot aims to advocate for reforms that promote improved governance and shareholder value.

This initiative follows Bitfarms’ recent acquisition of Stronghold Digital Mining for approximately $125 million, including an estimated $50 million in assumed debt.

Bitfarms has responded to Riot’s letter, indicating that the upcoming special shareholder meeting does not concern corporate governance issues and asserting that recent governance changes were made independently of Riot Platforms.