Bitfarms Reports $27 Million Net Loss in Q2 2024 Amid Bitcoin Halving Challenges

Toronto-based Bitcoin mining firm Bitfarms has revealed a challenging quarter, reporting a net loss of $27 million for Q2 2024. The company’s financial performance reflects the broader impact of the recent Bitcoin halving event, which has significantly reduced block rewards and increased production costs.

Financial Results Highlight Increased Costs and Reduced Earnings

In the second quarter of 2024, Bitfarms faced a significant financial setback, with a net loss of $27 million, equating to a loss of $0.07 per share. This marks a substantial decline compared to the previous quarter’s net loss of $6 million, or $0.02 per share. The Q1 results had included a $9 million non-cash gain from revaluing warrant liabilities, contrasting sharply with the Q2 inclusion of a $1 million non-cash expense for similar revaluations.

Despite generating 614 BTC during the quarter, the company’s average direct production cost per Bitcoin soared to $30,600, up from $18,400 in Q1. The total cash cost per Bitcoin also saw a sharp increase, reaching $47,300 in Q2, compared to $27,900 in the previous quarter. The rise in costs is primarily due to the reduced quantity of Bitcoin produced post-halving, exacerbating the financial strain on the company.

Bitfarms’ Strategic Expansion Amid Financial Strain

Despite the challenging financial environment, Bitfarms has continued to push forward with its strategic expansion. In July, the company reported a 34% increase in Bitcoin earnings, producing 243 BTC valued at $14 million, up from 189 BTC worth $11 million in June. This uptick in earnings reflects the company’s resilience and ongoing efforts to optimize its operations.

Newly appointed CEO Ben Gagnon, who assumed the role last month, emphasized Bitfarms’ commitment to growth and diversification. The company’s latest venture includes a new mining site in Sharon, Pennsylvania, marking Bitfarms’ entry into the PJM energy market—a region Gagnon described as the most promising in the U.S. This expansion is part of the company’s broader strategy to increase its mining capacity to 21 EH/s and achieve 21 watts per terahash (w/TH) by the end of 2024.

Bitfarms Rejects Hostile Takeover, Focuses on Independent Growth

Bitfarms is currently navigating a hostile takeover attempt from competitor Riot Platforms, which proposed a $950 million acquisition in April 2024. However, Riot later withdrew the offer, citing challenges in negotiations with Bitfarms’ current board. In response, Bitfarms’ Special Committee reaffirmed its commitment to pursuing an independent path, stating that it would continue to execute its strategic plan while remaining open to opportunities that could enhance shareholder value.

Also Read: Bitcoin Bear Market Ahead? Analyst Discusses Bull-Bear Cycle Indicator