HIVE Revenues Down 45% in Q3 Despite Higher BTC Production

HIVE Blockchain Technologies Ltd. (NASDAQ:HIVE), a cryptocurrency mining company focused on green energy, announced on Wednesday its financials for the third quarter of 2022. Similar to other publicly listed miners, HIVE reported a visible slump in revenue compared to the previous year due to the drop in Bitcoin (BTC) and Ethereum (ETH) prices.

According to the press release, HIVE was able to mine 858 BTC and 7309 ETH using clean energy during the previous quarter, achieving revenue of $29.6 million, which translates to a 45% decline compared to $42.9 million reported in the same period year earlier.

HIVE’s Bitcoin production rose by 4.5% quarter-over-quarter (QoQ) and 31% year-over-year (YoY), mainly due to the purchase of 17,300 new ASIC miners expanding the company’s New Brunswick data center facility to 60 MW of power.

The lower Bitcoin prices gross mining profit margin achieved by the mining company stood at $15.9 million, lowering by $41% QoQ from $27 million. It translated into a net loss of $37 million, compared to a net income of $38.9 million in Q3 2021.

“It was an extremely challenging quarter for the global digital asset ecosystem, where we saw the capitulation of crypto prices due to the Proof of Stake ‘PoS’ Luna token blow up in the spring and subsequent contagion from over leveraged ‘shadow banks’, hedge funds and offshore exchanges. Strategically, we have not borrowed expensive debt against our mining equipment or pledged our Bitcoins for costly loans, thus our balance sheet remains healthy to weather this storm,” Frank Holmes, the Executive Chairman at HIVE, said.

“We believe our low coupon fixed debt; attractive green renewable energy prices and high performing energy efficient ASIC chips will help us navigate through this crypto winter.”

Crypto Miners Under Mounting Pressure

Publicly-held crypto miners have entered the earnings season for the third quarter, and the results do not look promising. The prolonged ‘cryptocurrency winter’ and the BTC price at the two-year lows cut mining profitability and negatively impacted share prices.

Last week Hut 8 Mining Corp. (NASDAQ:HUT) reported revenue of CAD 18.6 million, which was significantly lower than CAD 50.3 million for Q3 2021. The financial results were reduced despite the fact that the digital asset mining company was able to mine more Bitcoins than last year (982 BTC).

Canaan Inc. (NASDAQ:CAN) is another Wall Street company from the mining industry, focusing on manufacturing hardware for miners, which reported diminishing financial results. During the three-month period that ended on 30 September 2022, the revenue slumped 40% QoQ to $137.5 million.

For stock traders, publicly-listed mining companies are an indirect way to gain exposure to the cryptocurrency sector. As a result, stock price fluctuations are largely dependent on the price of Bitcoin and other tokens. For example, HIVE shares have lost more year-to-date (80%) than BTC itself (60%). However, during the market boom, they guaranteed higher returns on investment than the oldest cryptocurrency.