Crypto Miner Hive Blockchain Posts Q3 Loss as Ethereum Merge Cuts Revenue, Mining Margin

The Canadian miner is launching its high-performance computing cloud business, which is 25 times more profitable than mining.

AccessTimeIconFeb 21, 2023 at 10:38 a.m. UTC
Updated May 9, 2023 at 4:08 a.m. UTC

Crypto mining firm Hive Blockchain (HIVE) slid to a fiscal third quarter loss as the Ethereum blockchain's switch to proof-of-stake validation cut its revenue and gross mining margin by about 50%.

The Vancouver-based firm reported a net loss of US$90 million, or $1.09 a share, for the quarter ended Dec. 31, compared with profit of US$51.2 million, or 66 cents a share, the year before, it said in a Tuesday release. It had a loss of US$37 million, or 45 cents per share, in the previous three months. The net was mainly attributed to impairment from depreciation of mining rigs and chips due to lower crypto currency prices, the statement said.

The last three months of 2022 was the first quarter Hive didn't mine any ether following Ethereum's Merge upgrade in September that ended the blockchain's proof-of-work validation method.

Hive's fiscal third quarter revenue was $14.1 million, fell about 52% from prior year mainly due to Ethereum's merge, higher global hashrate growth and lower cryptocurrency prices, according to the statement. Meanwhile, its gross mining margin was also affected by the falling crypto prices as it declined to $3.6 million or 25% of income from crypto mining versus $15.9 million, or 54% from the same period in the prior year.

"HIVE has skillfully navigated the digital asset mining industry in a post-Ethereum merge, when many questioned how we could continue to generate profit from operations. This has been answered by our gross mining margins of $3.6 million this quarter, during a time when many other crypto miners are struggling for solvency," CEO of Hive Aydin Kilic, who took over Jan. 17, said in the statement.

Some of the ways Hive navigated the tough quarter is by using some of its graphics processing units (GPUs), formerly used to mine ether, to mine other crypto tokens that it then converts into bitcoin. Its post-Merge strategy also includes launching HIVE Performance Cloud, redirecting its GPUs to support high-performance computing workloads other than mining.

“This is an evolution of our skillset as a technology company and sets the stage for a new era in HIVE’s outlay of technology services," Kilic said. The company also sold energy back to the power grid and upgraded its mining machines to improved efficiency during the quarter, he added.

In current market conditions, the cloud segment is 25 times more profitable than mining when measuring in dollars per megawatt hour, or electricity consumption, Hive said Tuesday. Hive expects $1 million of annual revenue on a run-rate basis for this business line.

The shares of the miner fell about 3.6% on Wednesday, in-line with its mining peers, while bitcoin fell about 2.9% in last 24 hours, according to TradingView data.

CORRECTION (Feb. 21, 10:48 UTC): Corrects second-quarter profit to loss in second paragraph.

UPDATE (Feb. 22, 18:52 UTC): Updates the story throughout to add revenue, mining margin numbers, share performance and additional contexts.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.