Bitcoin mining company Hut 8 released an update on Tuesday detailing the efficiency of its Bitcoin (BTC) production over the last month.
After the company – which trades on the NASDAQ under the ticker symbol HUT – generated 111 BTC in September, it said it had not sold a single satoshi during that time.
“We are fortunate that, unlike some single-threaded miners, we do not have to sell our Bitcoin production to fund operations,” Erin Dermer, senior vice president of communications at Hut 8, said via email Decrypt.
Mining companies use energy-intensive computer hardware to secure fresh BTC, which is their source of income. This is offset by the electricity costs for operating such machines and the purchase costs for the machines themselves.
In general, miners who can secure the cheapest electricity (which often comes from sustainable sources) have the greatest competitive advantage. However, many miners are now diversifying their activities into high-performance computing, which industry participants say is far more profitable per unit of energy than Bitcoin mining.
Hut is also making inroads into this area, which could help bring the disappointing sales figures otherwise recorded during the year under control. In the second quarter, the company had net sales of just $19.2 million, compared to $43.8 million in the same period last year.
At the time, Hut attributed the decline in sales to increasing difficulties in the Bitcoin network and equipment failures at some of its key facilities.
Hut could face further revenue issues following April’s Bitcoin “halving,” which will halve the rate at which miners earn new BTC. While threatening in the short term, many companies ramped up production ahead of the halving in anticipation of a Bitcoin bull market, which has historically haunted the event every time it occurs.
“We believe that post-halving, some miners will face headwinds as efficiency is paramount, difficulty increases, and block rewards are reduced by half,” Derner said. “Hut 8 has been a long-time HODLer of Bitcoin as we are optimistic that the value will increase over time.”
Hut is now looking forward to a merger with USBTC later this year to become Hut 8 Corp, which the companies say will offer “both Bitcoin and diversified fiat revenue streams,” including services such as high-performance computing.
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