Bitfarms mining revenue drops 45% to $7 million in first full month after Bitcoin halving

Bitcoin miner Bitfarms released its latest monthly production data, which highlights the Bitcoin halving effect on the company’s bottom line and raises concerns about industry consolidation.

In its monthly update , Bitfarms said it earned 156 BTC in May, a 42% drop from the previous month and down 66% year over year. Of that earned, it sold 136 BTC for total proceeds of $8.9 million (down from $16.1 million in April) as part of the company’s regular treasury management process. 

Bitfarm’s total amount of BTC held in treasury increased to 850 BTC, representing $57.2 million based on a BTC price of $67,300 on May 31.

The 24.5 BTC/average EH/s (meaning that for every average exahash per second of computational power, 24.5 bitcoin were earned) is down 45% from the previous month, the company said, as May was the first full month with "post-halving economics." The 5.0 BTC earned daily on average equals about $340,000 per day based on a BTC price of $67,300 on May 31.

Bitcoin halvings are programmed to occur automatically roughly every four years. After a halving event, miners receive 50% fewer bitcoins as a subsidy reward for every block of transactions they mine and add to the blockchain. They continue to earn additional transaction fee rewards for each block mined.

“Our fleet upgrade is progressing at a rapid pace. Year-to-date we have received 25,600 miners and installed 23,600 miners, with the remaining 16,200 miners in route. Together, these miners provide sufficient hashing power to achieve 12 EH/s in June,” said Ben Gagnon, Bitfarms' Chief Mining Officer.

Takeover denied

Last week, it was announced that Bitfarms had rejected a nearly $1 billion acquisition proposal from Riot Platforms, another Bitcoin mining company.

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Riot wanted to buy out all of Bitfarms' outstanding shares at $2.30 a piece, a 24% premium on the one-month weighted average per share, according to Riot Platforms. The deal would have cost $950 million in total equity value. Riot has since purchased a 9.25% stake in Bitfarms, making Riot the largest shareholder in the firm.

Bitwise Senior Crypto Research Analyst Juan Leon noted that combining the operations of two firms would result in "52 EH/s of self-mining capacity by year-end 2024 across 15 sites globally."

Bitfarms let go of former CEO Geoffrey Morphy on May 13, after Morphy filed a $27 million suit against the firm for alleged breach of contract, wrongful dismissal and aggravated and punitive damages, The Block previously reported .

"The Bitfarms board is now dealing with the poorly planned ouster of the CEO and a hostile takeover," Leon said. "Additional bids could result in a higher takeover price, benefitting shareholders."

Bitfarms’ stock was trading higher by 4% to $2.33 per share at publication time, according to Yahoo Finance. Shares were down 18% in the year-to-date period.

Founded in 2017, Bitfarms currently has 12 operating Bitcoin mining facilities and one under development in four countries: Argentina, Canada, Paraguay and the United States.