Bitcoin Miner Bitfarms Sinks to Fourth-Quarter Loss as Difficulty, Costs Rise

Bitfarms is shooting for 6 exahash per second of computing power by the end of 2023, the same goal it had set, and missed, for 2022.

AccessTimeIconMar 21, 2023 at 11:38 a.m. UTC
Updated May 9, 2023 at 4:10 a.m. UTC

Bitcoin miner Bitfarms (BITF) dropped to a fourth-quarter loss as the price of bitcoin fell, costs rose and mining difficulty increased. The firm said it is examining acquisition prospects.

The Toronto-based firm posted an 8 U.S. cent loss per share, down from 5 cents profit the year before, according to a Tuesday filing with the U.S. Securities and Exchange Commission. Gross mining margin fell to 33% from 52% in the third quarter.

The fourth quarter was rough for many miners, with the price of bitcoin slumping to as low as $16,000 and mining difficulty increasing. Mining difficulty is automatically adjusted as more computing power comes onto the network to keep the time required to mine a block roughly stable at 10 minutes. The profitability of mining, measured in Luxor Technologies' hashprice, fell by 25% in the three-month period.

The firm failed to reach its reduced target of 5 exahash/second (EH/s) of computing power by year's end, achieving just 4.5 EH/s. Bitfarms cut its expectation from 7.2 EH/s to 6 EH/s in May, and to 5 EH/s in November.

"Looking ahead, we plan to leverage our existing infrastructure in Argentina and utilize equipment credits to prudently expand our EH/s to 6.0 with our existing assets by year end 2023," President and CEO Geoff Morphy said in the filing. "With our strengthened balance sheet, we are actively evaluating potential acquisitions that we expect to be accretive and complement our geographically diverse mining operations,"

Bitfarms has been trying to lower its debt obligations during the bear market, as are other miners including Stronghold Digital Mining (SDIG) and Marathon Digital Holdings (MARA). In February, bankrupt lender BlockFi took a two-thirds loss to settle $21 million of outstanding debt with Bitfarms. That helped Bitarms cut debt obligations by 86% compared to June 2022.

The Toronto firm said earnings before interest, tax, depreciation and amortization (EBITDA) slumped to $7.4 million from $29 million in the year-earlier period. Revenue for the quarter was $27 million, roughly half the prior-year figure.

For all of 2022, Bitfarms reported a $1.15 basic loss per share, compared with earnings of 14 cents in 2021 while revenue fell 15%.


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Eliza Gkritsi is CoinDesk's crypto mining reporter.

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