The month of July saw the price of Bitcoin fall by 4% to $29,230 and the mining difficulty increased by 1.4% to achieve another record level. Due to the hot summer temperatures the North American Bitcoin miners were also forced to curtail their energy and switch off their machines.
However, on a positive note, the month’s big news story was Marathon Digital (MARA) becoming the World’s largest publicly listed Bitcoin self- miner. Having already achieved 17.7 EH/s in the previous month, the company continued to energize miners and reported an increased energized hash rate of 18.8 EH/s for the month of July, an increase of 169% year-to-date, overtaking CoreScientific (CORZQ) self mined hash rate.
The company mined 1,176 Bitcoin in July, followed by CleanSpark with 575 and Iris Energy moving into 3rd position for the first time with 423 Bitcoin.
Revenue by Energized Hash Rate PH/s
It’s time to introduce another mining metric – Revenue by Energized Hash Rate. This metric focuses on the number of miner machines installed and energized each month and considers the total revenues achieved through Bitcoin mining and also the additional revenues from power sales and demand response programs, when machines are curtailed. It should highlight quickly those miners who have been forced to switch off their machines due to price spikes in power costs, or downtime required for maintenance and servicing.
As can be seen from the graph below, Iris Energy (IREN) achieved a total of $2,297 per energized PH/s during the month from a good consistent uptime of 99% and the benefit of also achieving $200k from their demand response programs. CleanSpark (CLSK) also had a utilization rate of 99% during the month, achieving $2,209 per PH/s.
DMG Blockchain (DMGI) had significant heat issues, as previously reported achieving just $1,349 per PH/s.
Argo Blockchain (ARBK)
Argo Blockchain mined 129 Bitcoin in the month of July at the rate of 4.1 Bitcoin per day, a reduction of 11.6% on the average daily rate achieved in June. The reasons for this reduction were the increased mining difficulty in July and the hot weather in Texas causing the power at the Helios facility to be curtailed. The company sold 127 Bitcoin in the month, to cover operational and capital costs, adding 2 coins to its new Bitcoin hodl of 46. It should be noted that the company will also benefit financially, from the demand response programs at the the Helios Facility.
The company installed and energized 1,242 BlockMiner machines, in the month of July at its facilities in Quebec. This increase of 130 PH/s brings their total hashrate capacity to approximately 2.6 EH/s. The Company further expects to receive and install the remaining 1,628 BlockMiners in the coming months taking them to their goal of 2.8 EH/s.
On the 18th July, Argo Blockchain used the Primary Bid Platform to place a total of 51,340,000 new Ordinary Shares to institutional investors at the price of 10 pence per Placing Share, raising gross proceeds of £5.134 million. The offer was also open to retail investors who subscribed in a separate offer made by the Company via the same platform for a total of 6,160,000 new Ordinary raising gross proceeds of £616,000.
Both placings were oversubscribed by both new and existing shareholders, with the company issuing a total of 57,500,000 new Ordinary Shares, increasing the shares outstanding by 12% and raising gross proceeds of approximately £5.75 million.
Bit Digital (BTBT)
Bit Digital produced 133 Bitcoin in July, at a rate of 4.3 Bitcoin per day, 8% higher than the daily rate achieved in the previous month. This was actually achieved without increasing the operational hash rate for the month of 1.78 EH/s.
The company currently has healthy treasury holdings of 677 Bitcoin and 12,167 Ethereum providing a total fair market value of $42.4 million, along with $21.9 million in cash and cash equivalents as at July 31, 2023.
Bit Digital continues to stake their crypto with 12,708 Ethereum actively staked in native and liquid staking protocols as of July 31, 2023 earning the company staking rewards of 43.8 ETH during July 2023.
Bitfarms (BITF)
In July Bitfarms mined 378 Bitcoin at a daily rate 12.2 Bitcoin per day, a reduction of 5% on the average daily rate achieved in June, and providing $11 million in revenues for the month with the Bitcoin price closing price of $29,200.
Bitfarms sold 333 Bitcoin, providing revenues of $9.9 million, during the month, adding 45 Bitcoin to its treasury and increasing its hodl to 594 Bitcoin. The company used the proceeds to cover operational costs and reduce total debt by a further $1.8 million, providing a new debt balance of $13.7 million. Considering the company had a reported debt balance close to $160 million a little over 12 months ago, this has been an amazing turnaround.
Apart from the difficulty increase in July, the company’s production was also impacted by intense weather events, causing curtailment across Quebec. In addition, a lightning strike to their Magog Farm caused the site to go offline for 7 days as their primary electricity transformer was disabled. No other damage was incurred.
On July 19, 2023 Bitfarms acquired two Power Purchase Agreements (PPAs) for up to 150 MW of hydropower in Paraguay providing up to 50 MW in Villarrica and and up to 100 MW in Yguazu, taking their hydropower capacity to 350 MW. Yguazu is located close to the Itaipu Dam, the third largest hydroelectric dam in the world. These new facilities will provide hydropower at both locations at a contracted cost of approximately 3.9c per kWh before VAT, and will not be subject to any annual inflationary adjustments.
A further 2,360 miners have recently arrived in Rio Cuarto, Argentina, and are currently being processed by customs authority, with a further 5,117 miners, held in transit.
The Baie-Comeau facility in Québec has increased its operational capacity to 5 MW on July 31, 2023, and is expected to reach 11 MW, as planned, in Q3 2023. The company expects to add a further 11 MW during the second half of 2024, taking the total planned capacity to 22 MW.
On the 7th August Bitfarms announced their first deployment of hydro-cooled mining technology at their new planned 50 MW facility Paso Pe, Paraguay, located in close proximity to its Villarrica, Paraguay facility due to be commissioned in Q1 2024. The 1,920 M53S+ miners should produce 675 PH/s with 28.5 W/TH efficiency and have the potential to be less expensive than immersion cooling technology.
CleanSpark (CLSK)
At the end of the previous month, CleanSpark had 6.7 EH/s of operational hash rate and in the last 30 days have issued a number of hash rate updates as phase two of its mining campus in Washington, Georgia, went live. This site alone increased the Company’s bitcoin mining hash rate by 1.8 EH/s.
As at July 31, 2023 the company has 9.0 EH/s operating hash rate, an increase of nearly 35% on the June total, and is now well on the way to achieving their year end target of 16 EH/s, all of which has been achieved in the space of 2 and a half years.
In July, CleanSpark mined 575 Bitcoin, taking their year-to-date total production to 4,070 Bitcoin, at a daily rate 18.5 per day, an increase of 13.3% on the previous month due to the increased average operational hash rate capacity of 7.6 EH/s achieving a hash rate utilization of 99%. They sold just 43 Bitcoin and increased their hodl by 100% in the month to 1,061 Bitcoin.
DMG Blockchain (DMGI)
DMG Blockchain mined 45.7 Bitcoin in July, at an average rate of 1.5 Bitcoin per day, a reduction of 15.9 % on the average achieved in June. This reduction was caused by the increased difficulty and ongoing heat issues as previously reported, causing their realized operational hash rate to be 0.61 EH/s, a reduction of 39% from their actual installed hash rate.
The company sold 33 Bitcoin during the month adding 12 coins to their current Bitcoin Hodl of 522 Bitcoin.
Hive Digital Technologies (HIVE)
Hive Digital mined 251 Bitcoin during the month from their ASIC machines and a further 8.1 Bitcoin from their GPUs, providing a daily average of 8.1 Bitcoin per day, a reduction of 1.3% on the daily average achieved in the month of June.
The company increased their Bitcoin mining operational hash rate to 3.47 EH/s during the month and are still expecting to achieve their year end hash rate goal of 6.0 EH/s
Hive Digital sold 70% of their monthly production adding 75 Bitcoin to its current total hodl of 2,032 Bitcoin valued at $59.4 million as at July 31, 2023.
After Ethereum moved to ‘proof of stake’ in September 2022, the company has since been utilizing their GPU hash rate to mine alternative crypto coins for which they receive payment in Bitcoin. If we consider that in August 2022, the last full month of mining Ethereum, these GPU miners achieved $4.68 million in monthly revenues, and then compare this to the $236k of revenues these same GPUs delivered in July 2023, that’s a drop of 95% in terms of revenues and effectively gross margin.
In their latest mining update Hive Digital announced that they have installed their latest fleet of Supermicro servers in Sweden to prepare for the tactical switch to High Performance Computing (HPC) and Artificial Intelligence (AI) infrastructure business. The launch of ChatGPT and similar AI technologies has accelerated demand for HPC services which has been a key reason for the installation of the CPU servers.
Frank Holmes, Executive Chairman Hive Digital, commented, “Based on current demand the blue-sky potential is over $100 million in revenue with very high operating margins.”
In the first quarter of 2023 the company achieved $250k in revenues from their GPUs for AI and HPC workloads, providing a run rate of $1m per year. Aydin Kilic, CEO Hive Digital said the company plans to continually scale the GPU AI and HPC business on a monthly basis between now and the end of December 2023 and the latest deployment of servers should allow that run rate of $1m to be tripled.
Iris Energy (IREN)
Iris Energy had another good month as it continues to move up the Bitcoin production tables, finishing 3rd behind Marathon Digital and CleanSpark, producing 423 Bitcoin in the month of July at a daily rate of 13.6 Bitcoin per day, a drop of 4.4% in the average daily rate achieved in June. This was achieved with an average operational hash rate of 5.56 EH/s and a utilization rate of 99%.
The company continues to sell their Bitcoin on a daily basis achieving $12.66 million in revenues to pay for operational and capital expenditure. The cost of energy per Bitcoin increased to $15,494 per coin in July from $13,011 in June, an increase of 19% due to increased energy costs at the Childress site in Texas, where energy is typically higher during the summer months.
Fortunately, the average price of Bitcoin also increased, reducing the impact to the gross margin for July, which reflected 48% compared to 52% in June.
Iris Energy benefited from curtailing its energy in July and received $0.2 million of estimated power sales at its Childress facility via its automated algorithm, equating to approximately 6 Bitcoin equivalent.
Marathon Digital (MARA)
The challenges that Marathon Digital faced in the previous two calendar years appear to be now firmly behind the company. They now have the world’s highest self-mining hash rate for a listed miner and had a good month in July, producing 1,176 Bitcoin at a daily rate of 37.9 Bitcoin per day, an increase of 16.2% on the daily rate achieved in June.
By the end of the month the company’s installed hash rate had increased to 22.8 EH/s, of which, 18.8 EH/s was fully energized. The company announced on August 8, 2023 that they have reached their planned installed hash target of 23 EH/s.
From an operational perspective their average hash rate achieved during July was 14.0 EH, representing an 82% utilization rate for the month. The company sold 750 Bitcoin, 64% of their production, increasing their hodl to 12,964 Bitcoin, valued at $378.9 million as at July 31, 2023. They also have $129.4 million in cash and cash equivalents of which $115.1m is unrestricted, providing a current total of $494 million of unrestricted cash, cash equivalents and Bitcoin.
Marathon Digital provided an update on the joint venture in Abu Dhabi which actually started production in July, producing 16.8 Bitcoin of which the company’s 20% share represents 3.4 Bitcoin. The hash rate at the end of July is now 1.2 EH/s with plans to grow to 7.0 EH/s by the end of the year.
Riot Platforms (RIOT)
Riot Platforms had a challenging month in terms of operational performance, producing 410 Bitcoin at an average of 13.2 Bitcoin per day, a reduction of 13.7% on the average achieved in June. This was due to the high temperatures in Texas, causing power costs to fluctuate. The company continued to utilize its power strategy, which enabled the team to navigate these sharp increases in power and generate $6.4 million in power credits with a further $1.8 million in demand response credits.
With the operational hash rate during the month at 10.7 EH/s, the company announced that the replacement dry coolers for Building G have already begun shipping. Once installed, miners will begin to be energized from the beginning of September. It is expected that once Building G is fully operational, this will increase the total self mining hash rate capacity for the Whinstone facility to 12.5 EH/s over the coming months.
Riot Platforms continues to progress the build at the Corsicana Facility in Navarro County, Texas and recently entered into a long-term purchase agreement with MicroBT, for an initial order of 7.6 EH/s of next-generation Bitcoin miners. Once fully deployed, by mid 2024, the company’s total self-mining hash rate capacity is expected to reach 20.1 EH/s.
SATO Technologies (SATO.V)
It was time to add a new miner to the growing number of public listed miners. SATO Technologies is currently a publicly traded miner on the Canadian Stock Exchange under the ticker symbol SATO.V.
The company powers its high-capacity computation centers using 20 MW of renewable Hydro Energy in Québec, Canada. These facilities support high-grade crypto-mining, AI data processing, and fintech infrastructure. In terms of growth, SATO Technologies has plans to secure an additional 100 to 500 MW of sustainable energy at its expanding computation centers by 2025.
In the month of July, the company mined 37 Bitcoin at an average rate of 1.2 Bitcoin per day, a reduction of 8.2% on the average achieved in June. The current operational hash rate for the month totalled 0.5 EH/s which was slightly lower than June, caused by the extreme weather and storms affecting the Mining Center One.
SATO Technologies sold 6 Bitcoin to cover their operational and capital costs during the month and increased their hodl to 43 Bitcoin with a value of $1.3 million. The company currently has a low total energy cost of USD 0.043 per kWh, which will place themselves in a good position as they approach the next halving.
TeraWulf (WULF)
On July 18, 2023, TeraWulf announced plans to expand its self-mining capacity to 7.9 EH/s by the end of the year, with the purchase of 18,500 of the next generation Antminer S19j XP Bitcoin mining machines for a total price of $53.4 million, with the deposit already paid to Bitmain, and once all the coupons and credits have been factored, the cost will equate to just $19.10 per TH/s.
These machines, with a power efficiency rating of 21.5 joules per TH/s, are to be deployed at the Company’s Lake Mariner facility in equal shipments during October, November and December, and once deployed will take the company’s total self-mining hashrate to 7.9 EH/s, an increase to the current self mining operational hash rate by 58%.
Having a fleet with an average fleet efficiency of 25.7 joules per TH/s and an average power cost, currently at 4.3c kWh should place the company in a strong position as the halving approaches in 2024.
In July 2023, the company produced 330 self-mined Bitcoin at an average daily rate of 10.6 Bitcoin per day, a reduction of 8% on the previous month. Despite the challenging weather and grid conditions the company produced the highest monthly self-mining revenue in their history.
The Lake Mariner facility experienced a fault on a grounding transformer, which tripped the power feed at the 345 kV level, taking most of their capacity offline temporarily. The team was able to assess the issue, implement the necessary repairs and get back online within 48 hours.
Bitcoin sold during the month of July
The North American listed miners continued to sell some of their production during July to cover their operational and capital costs. Both TeraWulf and Iris Energy have continued to sell their Bitcoin in full each month, but it was interesting to see that all other miners in the graph below were able to add and increase their Bitcoin hodl from June.
Cleanspark increased their Bitcoin hodl by 532 Bitcoin taking their hodl as at July 31, 2023 to 1,061 Bitcoin an increase of 100% on the June position. SATO Technologies were also able to add the majority of their production, increasing their hodl to 43 Bitcoin in month.
Monthly and Year to Date Miner Performance
Marathon Digital had a great month in terms of mining per available hash rate. Having mined 1,176 Bitcoin with 14.0 EH/s of available hash rate they effectively achieved 84 Bitcoin per EH/s. This total was more than 10% higher than Hive Blockchain and Iris Energy achieved during July, per EH/s.
The Miner Mag included in their monthly metrics, the realized hashrate for each miner, which is based on one’s production of bitcoin and bitcoin equivalent from proprietary hash rate. It suggested that Marathon Digital had a realized hash rate of 15.48 EH/s.
The next seven miners in the graph were separated by less than 2% which shows the consistency of operational performance, with Hive Digital and Iris Energy making up the top 3 for the month.
The table below looks at the performance of each miner in terms of Bitcoin produced per EH/s, during the first 7 months of 2023. The gap between the top 6 miners is currently 5% and the consistency of their monthly Bitcoin production is clear to see. Bitfarms remain ranked in first place for 2023, closely followed by Hive Digital, Iris Energy and CleanSpark.
Argo Blockchain and Riot Platforms have both reported their share of issues this year. Both miners are receiving credits for their curtailment in 2023, which should help towards the financial position.
Reporting Season
The North American Listed miners should now be preparing to report their quarterly earnings over the next 3 weeks. It will be interesting to see how the second quarter of 2023 compares to the first quarter in terms of gross mining and operating margins and to see which miners are starting to prepare in advance of the next Bitcoin halving, due to occur in April 2024.
