Bitcoin mining company Bitfarms faced a significant drop in revenue in May, its first full month operating under the effects of the recent Bitcoin halving event. The halving, which occurred in mid-April, cut the Bitcoin block reward for miners in half, impacting their profitability.
Halving Takes Bite Out of Revenue
Bitfarms reported a 42% decrease in Bitcoin production in May compared to April. The company mined 156 Bitcoin (BTC) in May, down from 263 BTC in April. This translates to a revenue decline from $18.1 million to $10.7 million over the same period.
The impact of the halving went beyond just production figures. Bitfarms also saw a 45% drop in its average efficiency metric, falling from 44 exahashes per second (EH/s) to 24 EH/s. This metric reflects the amount of Bitcoin earned per unit of computational power used for mining.
Beyond the Halving: Additional Challenges
Bitfarms attributed part of the production decline to unforeseen circumstances beyond the halving’s influence. Unusually cold temperatures plagued their Rio Cuarto facility in Argentina, forcing them to curtail operations for eight days. This facility experienced its worst weather conditions in 44 years, according to the company.
However, there was a silver lining. The network difficulty for Bitcoin mining decreased by 4.2% in May compared to April, partially offsetting the production losses caused by the weather and the halving event.
Expansion Plans Forge Ahead
Despite the temporary setbacks, Bitfarms remains committed to growth. The company secured an additional 100 megawatts of power at its Yguazu facility in Paraguay through a new agreement with the state-owned electricity provider Administración Nacional de Electricidad. This expansion will double the site’s capacity to 200 megawatts and has the potential to add 6 EH/s to Bitfarms’ hash rate upon completion in 2025.
With this expansion and the arrival of 16,200 new miners currently in transit, Bitfarms projects its hash rate to climb to 12 EH/s. This bump in power would position them as the fifth-largest mining operation globally, according to data from Hashrate Index. The company currently operates mining facilities in the United States and Canada alongside its South American operations.
While Bitfarms grapples with the post-halving environment, its stock price (BITF) saw a surprising 2.92% increase on the Nasdaq on June 3rd. This positive movement comes despite a 42% drop in Bitcoin production for the month.
However, looking at the bigger picture, BITF remains down 15.9% year-to-date in 2024. This follows a stellar performance in 2023, where the company’s stock price soared by an impressive 588%.
Looking Ahead
Bitfarms’ experience highlights the challenges faced by Bitcoin miners in the wake of the halving event. The company is navigating a complex landscape, balancing production shortfalls with strategic expansion plans. While the short-term outlook may be impacted, their commitment to growth suggests a focus on long-term sustainability in the competitive world of Bitcoin mining.
