Riot Blockchain

Bitcoin hashrate recovers after big freeze shuts down miners

The Bitcoin network hashrate has returned to 241.29 EH/s after a temporary 38% fall to 170.60 EH/s from a weekly peak of 276.40 EH/s.

Bitcoin’s network hash rate has returned to regular levels again, days after freezing temperatures across the United States put a strain on the nation’s electricity grid — leading to a temporary drop in hash rate.

In the days leading up to Christmas, bone-chilling temperatures swept across the United States, leading to millions without power and claiming at least 28 lives.

According to reports, Bitcoin (BTC) miners in Texas, which accounts for a significant portion of the country’s hash rate, voluntarily curtailed operations to give power back to the grid — so that residents can keep their homes heated. 

The disruptions appear to have put a dent in Bitcoin’s hash rate, which typically hovers around 225-300 Exahashes per second (EH/s). This fell to 170.60 EH/s on Dec. 25.

As of Dec. 26, however, the hash rate has returned to 241.29 EH/s, according to data from hash rate mining calculator CoinWarz.

Bitcoin’s hash rate is calculated by measuring the number of hashes produced by Bitcoin miners trying to solve the next block. It is regarded as a key metric in assessing how secure the Bitcoin network is.

The recent events prompted a controversial statement from FutureBit founder John Stefanop, who suggested the fall in hash rate was due to a number of “highly centralized mines” in Texas turning off at the same time.

“I know, does not change the fact that a few large mines in Texas affect the entire network to the tune of 33%…everyones transactions are now being confirmed 30% slower because the hashrate is not decentralized enough,” he said.

“If hashrate was distributed evenly around the world by 10’s of millions of small miners instead of a few dozen massive mines, this event would not have even registered on the network,” Stefanop added.

Bitcoin bull Dan Held however refuted Stefanop’s take on the events, arguing that weather patterns do not mean centralized ownership or control.

According to the Cambridge Bitcoin Electricity Consumption Index, the United States accounts for 37.84% of the average monthly hash rate share. The top four states in the country for Bitcoin mining include New York, Kentucky, Georgia and Texas — all of which had experienced power outages due to the winter storm.

However, Dennis Porter, the CEO of Bitcoin mining advocacy group Satoshi Action Fund noted to his 127,400 Twitter followers on Dec. 25 that while the inclement weather, particularly in Texas, caused 30% of Bitcoin’s hash rate in the United States to go offline, the network “continues to work perfectly.”

Cheap power and favorable mining regulation in Texas has led to a Bitcoin mining boom in Texas in recent months, which is now host to some of the largest mining companies in the world.

Among those Riot Blockchain, Argo, Bitdeer, Argo, Compute North, Genesis Digital Assets and Core Scientific — who’ve recently received a $37.4 million bankruptcy loan to stay afloat.

Related: ‘There’s a lot less land to go around’ — Why White Rock established off-the-grid mining in Texas

However, recent weather events have only added to Bitcoin mining companies’ list of headaches.

The bear market has plagued Bitcoin mining companies to the tune of $4 billion in debt, according to recent data.

Many notable United States-based mining companies have filed for bankruptcy in recent months too, while many other companies are approaching near-insurmountable debt-to-equity ratios that require immediate restructuring.

The tragic weather events haven’t impacted the price of Bitcoin thus far, which is currently priced at $16,826 — only down 0.27 over the last 24 hours.

Marathon is now the 2nd-largest listed holder of Bitcoin, says CEO

The United States-listed Bitcoin miner has produced at least 1,231 Bitcoin since the start of July and has sold none of it to date.

Bitcoin (BTC) mining company Marathon Digital Holdings is now understood to be the second-largest holder of Bitcoin in the world among publicly-listed companies.

During the company’s third-quarter earnings call on Nov. 8, Marathon Digital CEO Fred Thiel revealed the company now holds 11,300 Bitcoin — worth around $205 million — “making Marathon the second largest holder of Bitcoin among publicly traded companies worldwide, ” referring to unnamed third-party data.

According to CoinGecko, the NASDAQ-listed crypto miner is ranked second only to MicroStrategy Inc., which holds nearly 130,000 total Bitcoin. It’s followed by crypto exchange Coinbase and Jack Dorsey-founded payments company Block Inc.

The company reported its third-quarter earnings on Nov. 8, noting that it added 616 Bitcoin to its holdings in the quarter, while another 615 Bitcoin was added in the month of October alone — the most productive month in the company’s history.

“The consistent improvement in our Bitcoin production is the direct result of increasing our hash rates by bringing more Bitcoin servers online and improving those servers,” said Thiel during the conference call.

The Marathon Digital CEO also confirmed that to date, the company still has not sold any of its Bitcoin, and will continue to take that position unless deemed “necessary to cover operating expenses or other expenses.”

This differs from other major miners such as Argo, Bitfarms, Core Scientific, and Riot Blockchain, all of whom had reported selling coins in order to pay the bills.

Thiel also used the call to make mention the “battle” between Binance CEO Changpeng Zhao and Sam Bankman-Fried — which he says is causing “turmoil” for the price of Bitcoin but said it would likely come back to a range of around $18,000 to $20,000, which they “feel very comfortable” in.

The Bitcoin miner’s earnings however took a beating in the third quarter, with its net loss nearly tripling compared to the prior year, reaching $75.4 million, while revenue fell 75.5% year-on-year to $12.7 billion.

Both metrics failed to meet analysts’ expectations as the miner’s exit from its Montana facility and falling Bitcoin prices led to lower BTC production in the quarter.

Thiel called the third quarter a period of “transition and rebuilding” after its exit from Hardin and it begins out capabilities in new locations, including the King Mountain wind farm in Texas.

Related: Bitcoin miner Iris Energy faces $103M default claim from creditors

On Nov. 7, rival Bitcoin mining firm Riot Blockchain also reported third-quarter earnings which had missed analyst expectations.

The firm’s total revenue declined 28.5% in the third quarter while its net loss widened 139.2% due to “significant curtailment activities” relating to its activities in Texas, and a significant decrease in the market price of Bitcoin compared to a year ago.

Both Riot Blockchain and Marathon Digital’s stock prices have declined over the past five days, with Riot Blockchain’s stocks down 17.62% and Marathon Digital’s down 18.02% in the past five days, according to Google Finance.

Marathon is now the 2nd-largest listed holder of Bitcoin — CEO

The United States-listed Bitcoin miner has produced at least 1,231 Bitcoin since the start of July and has sold none of it to date.

Bitcoin (BTC) mining company Marathon Digital Holdings is now understood to be the second-largest holder of Bitcoin in the world among publicly-listed companies.

During the company’s third-quarter earnings call on Nov. 8, Marathon Digital CEO Fred Thiel revealed the company now holds 11,300 BTC, worth around $205 million at the time of writing, “making Marathon the second largest holder of Bitcoin among publicly traded companies worldwide, ” referring to unnamed third-party data.

According to CoinGecko, the Nasdaq-listed crypto miner is ranked second only to MicroStrategy Inc., which holds nearly 130,000 BTC. It’s followed by crypto exchange Coinbase and Jack Dorsey-founded payments company Block Inc.

The company reported its third-quarter earnings on Nov. 8, noting that it added 616 BTC to its holdings in the quarter, while another 615 BTC was added in the month of October alone — the most productive month in the company’s history.

“The consistent improvement in our Bitcoin production is the direct result of increasing our hash rates by bringing more Bitcoin servers online and improving those servers,” said Thiel during the conference call.

The Marathon Digital CEO also confirmed that to date, the company still has not sold any of its Bitcoin, and will continue to take that position unless deemed “necessary to cover operating expenses or other expenses.”

This differs from other major miners such as Argo, Bitfarms, Core Scientific and Riot Blockchain, all of whom had reported selling coins in order to pay bills.

Thiel also used the call to make mention the “battle” between Binance CEO Changpeng Zhao and Sam Bankman-Fried — which he says is causing “turmoil” for the price of Bitcoin but said it would likely come back to a range of around $18,000 to $20,000, which they “feel very comfortable” in.

The Bitcoin miner’s earnings however took a beating in the third quarter, with its net loss nearly tripling compared to the prior year, reaching $75.4 million, while revenue fell 75.5% year-on-year to $12.7 billion.

Both metrics failed to meet analysts’ expectations as the miner’s exit from its Montana facility and falling Bitcoin prices led to lower BTC production in the quarter.

Thiel called the third quarter a period of “transition and rebuilding” after its exit from Hardin and it begins out capabilities in new locations, including the King Mountain wind farm in Texas.

Related: Bitcoin miner Iris Energy faces $103M default claim from creditors

On Nov. 7, rival Bitcoin mining firm Riot Blockchain also reported third-quarter earnings which had missed analyst expectations.

The firm’s total revenue declined 28.5% in the third quarter while its net loss widened 139.2% due to “significant curtailment activities” relating to its activities in Texas and a significant decrease in the market price of Bitcoin compared to a year ago.

Both Riot Blockchain and Marathon Digital’s stock prices have declined over the past five days, with Riot Blockchain’s stocks down 17.62% and Marathon Digital’s down 18.02% in the past five days, according to Google Finance.

BlackRock’s newest ETF invests in 35 blockchain-related companies

“We believe digital assets and blockchain technologies are going to become increasingly relevant for our clients,” said BlackRock ETF product strategist Omar Moufti.

BlackRock, the world’s largest asset manager, has just launched a new exchange-traded fund (ETF) to provide European customers with exposure to the blockchain industry, while reports indicate a Metaverse-focused ETF may be on the way. 

The new blockchain ETF launched on Sept. 27 is called the iShares Blockchain Technology UCITS ETF.

BlackRock said 75% of its holdings consist of blockchain companies such as miners and exchanges, while the other 25% are companies that support the blockchain ecosystem.

The fund includes 35 global companies out of a total of 50 holdings, which also includes fiat cash and derivatives, but does not directly invest in cryptocurrencies.

BLKC marks the latest of a series of moves into the digital assets space for BlackRock, with the most recent being the launch of a private spot Bitcoin trust on Aug. 11.

In a Sept. 29 report from Finextra, product strategist for thematic and sector ETFs at BlackRock Omar Moufti said the ETF will “allow our clients the opportunity to engage with global companies leading the development of the emerging blockchain ecosystem,” adding: 

“We believe digital assets and blockchain technologies are going to become increasingly relevant for our clients as use cases develop in scope, scale and complexity.”

The top five holdings in the fund are Coinbase (13.20%), USD cash (13.00%), fintech firm Block (11.40%), crypto mining firms Marathon Digital Holdings (11.13%) and Riot Blockchain (10.50%).

Other holdings include 23 IT companies, six financial companies, one industrials company and one communications company, with 50 holdings in total as of Sept. 28.

However, a Bloomberg report on Sept. 29 suggests that BlackRock may be working on another ETF — focused on the Metaverse, called the iShares Future Metaverse Tech and Communications ETF. 

Related: Wealth managers and VCs are helping drive institutional crypto adoption — Wave Financial execs

The report said that the fund’s fees and ticker are not yet listed but might include “firms that have products or services tied to virtual platforms, social media, gaming, digital assets, augmented reality and more.”

The Metaverse ETF follows insights published on Feb. 14 from BlackRock Technology Opportunities Fund co-portfolio manager Reid Menge, who labeled the Metaverse a “revolution in the making.”

‘Metaverse’ mentions in company transcripts. Source: BlackRock Market Minute citing Morgan Stanley, 2021.

On Aug. 4, Coinbase announced that it had entered into a partnership with BlackRock and appeared to be reaping the rewards of the partnership with its high weighting in BLKC.

The partnership gives institutional investors the ability to access crypto through its Coinbase Prime service.

Riot Blockchain’s Bitcoin mining productivity dropped 28% YOY amid record Texas heat

“The company voluntarily curtailed its energy consumption in order to ensure that more power would be available in Texas,” said Riot CEO Jason Les.

Crypto mining firm Riot Blockchain reported it produced fewer Bitcoin (BTC) in July 2022 than that in July 2021 after scaling down operations at its Texas facility.

In a Wednesday announcement, Riot said its miners had produced 318 Bitcoin in July, more than 28% less than the 443 BTC the firm reported generating in July 2021. According to Riot CEO Jason Les, the firm curtailed operations by 11,717 megawatt-hours in July in response to increasing demand on Texas’ energy grid. Many parts of the Lone Star State experienced several days with temperatures over 100 degrees Fahrenheit, requiring additional power for air conditioners.

“As energy demand in [Electric Reliability Council of Texas, or ERCOT] reached all-time highs this past month, the company voluntarily curtailed its energy consumption in order to ensure that more power would be available in Texas,” said Les.

According to Les, while the mining firm produced 125 fewer Bitcoin than that in July 2021 — worth roughly $2.9 million at the time of publication — curtailing its operations and sending power back into Texas’ grid provided Riot with an additional $9.5 million in credits and other benefits. Riot also reported that it sold 275 BTC in July, netting the firm roughly $5.6 million. As of Sunday, the company held 6,696 self-mined Bitcoin.

Related: Texas a Bitcoin ‘hot spot’ even as heat waves affect crypto miners

Cointelegraph reported in July that other Texas-based crypto miners, including Core Scientific and Argo Blockchain, had reduced their operations in anticipation of the state’s energy grid being unable to meet demand, as was the case during a severe winter storm in February 2021. Riot announced in July that it planned to move crypto miners from New York to its Whinstone facility in Texas in an effort to reduce the firm’s operating expenses through lower power costs and eliminate “all third-party hosting fees.”

Coming to Texas: Riot Blockchain announces plans to move NY miners to Lone Star State

Moving rigs from New York to Texas was part of Riot’s effort to reduce the firm’s operating expenses through lower power costs and eliminate “all third-party hosting fees.”

Crypto mining firm Riot Blockchain said it has begun relocating rigs from its New York data facility, with the majority intended to end up in central Texas.

In a Wednesday announcement, Riot said it has transitioned some of its mining rigs from a Massena, New York facility — named Coinmint — as part of an effort to reduce the firm’s operating expenses through lower power costs and eliminate “all third-party hosting fees.” The company said it planned to “ship the balance of its S19 miner fleet” at Coinmint to Riot’s Whinstone facility in Rockdale, Texas in July.

The move comes amid many parts of Texas experiencing temperatures over 100 degrees Fahrenheit, and power demands rising for air conditioners to keep residents cool. Data from the state’s primary energy provider, the Electric Reliability Council of Texas, or ERCOT, forecast that prices for its southern hub — which would include Riot’s facility in Rockdale — would peak at $95.94 per MW-hour over the next 24 hours. However, some reports suggest that energy production from wind and solar has helped to reduce costs amid increasing power demands.

Riot’s operations in Texas seemingly included preparations for the state’s heat wave. The company reported the construction of two air-cooled buildings in progress, one completed, and another in which “initial miner deployments have begun” as the firm finished some electrical work.

CEO Jason Les said the firm would curtail its energy consumption this summer as part of an ERCOT program aimed at addressing demand on Texas’ power grid. Cointelegraph reported in February that Riot shut down 99% of its operations in the state in anticipation of a possible severe winter storm requiring high energy demands — low temperatures and heavy snowfall were behind many parts of the state being without power for days in February 2021.

Related: City of Fort Worth votes in favor of Bitcoin mining program

The crypto mining firm reported it had produced 421 Bitcoin (BTC) in June but sold 300 BTC for $6.2 million, leaving Riot holding roughly 6,654 coins as of Thursday. The company reported there were 42,455 miners in its fleet producing a hash rate of 4.4 exahashes per second (EH/s), but planned to have a capacity of 12.5 EH/s following the deployment of 115,450 Antminer rigs by January 2023.