Hut 8’s profit plunges as bitcoin miners struggle after April’s halving

Canary in the coin mine… Hut 8, one of the largest bitcoin miners in North America, saw its shares slip yesterday after it reported disappointing earnings. The biz lost nearly $72M in the second quarter compared to a $251M Q1 profit. Most of the loss came from an accounting-rule change requiring companies to reflect crypto’s market price on their balance sheets (think: unrealized gains or losses). While BTC is down from its March high of $73K+, Hut 8’s sagging crypto output also hurt its earnings. It produced just 279 BTC in Q2, down from 740 on the year. Cue the finger-pointing at April’s “halving”…

• Zeno’s profits: About every four years, the amount of bitcoin miners earn for generating a block is cut in half. The change is programmed into the OG crypto’s code, and it can hit miners’ revenues hard.

• To a trickle: This reward reduction (aka the halving) steadily decreases the rate at which new BTC is born. FYI: the total max supply = 21M coins, and 94% has already been mined.

Earnings on the mine… Hut 8 isn’t the only bitcoin biz facing a profit problem. This month Marathon Digital, the world’s largest bitcoin miner, reported that its losses also widened. The stock’s down 32% this year. Fellow miners Riot Platforms, CleanSpark, and Core Scientific also reported big losses. Plus, bitcoin’s hash rate — a measure of how difficult it is to mine one block — hit a record high last month. Hut 8 said the cost to mine one BTC at its facilities (picture: walls of servers and cooling fans) nearly doubled on the year to $26K.