- The net proceeds from Bitcoin sales totaled $8.6 million, down 29% compared to July.
- Despite the fall in production, Riot held 7,309 BTC, reflecting no change from the previous month.
Riot Platforms, Inc., a major player in the Bitcoin [BTC] mining sector and data center hosting, has released its production updates for August 2023.
Interestingly, Riot earned $31.7 million in energy credits from Texas power grid operator ERCOT in August 2023 by voluntarily reducing energy consumption during a heatwave, surpassing the value of the 333 Bitcoins it mined, worth about $8.9 million.
To alleviate energy grid stress, Riot, like other Bitcoin miners, worked with ERCOT to curtail power usage during peak demand. Texas had been a supporter of the mining industry through energy credits, though a bill to end these credits in 2023 didn’t pass. Instead, Texas introduced mining-friendly bills, effective 1 September, expanding incentives and reducing industry red tape.
The economic equation for miners involved grid operators compensating them for lost mining revenue. Miners like Riot readily curtail operations if they receive slightly more from grid operators than they would have earned from Bitcoin mining during that period.
This mutually beneficial arrangement helps stabilize the energy grid in ERCOT-dominated Texas while providing miners with income. The energy credits have become vital for Riot, helping lower Bitcoin mining costs.
Bitcoin production, energy credits, and strategic growth initiatives shine
According to the production update, Riot generated 333 Bitcoins in August, representing a 19% decrease compared to July.
The average daily production of Bitcoin was 10.8, down 19% from July. Despite the decrease in production, Riot held 7,309 BTC, reflecting no change from the previous month.
The company also sold 300 BTC in August 2023, marking a 25% decrease from July 2023. The net proceeds from Bitcoin sales totaled $8.6 million, down 29% from the previous month.
Riot’s deployed hash rate remained steady at 10.7 EH/s (exahash per second), reflecting no change. The number of deployed miners also remained the same at 95,904.
These statistics position Riot as one of the low-cost Bitcoin producers in the industry. The company’s unique power strategy and efficient miner fleet also positions it favorably for the upcoming Bitcoin “halving” event.
Despite a massive 8,000% revenue increase in 2021, the crypto market downturn in 2022 resulted in a net loss of over $500 million for Riot. In Q3 2023, the company faced a $27.7 million loss.
Riot’s stock price, despite a 230% increase in 2023, remains far from its 2021 peak of $77.90. Low trading volume, energy price increases, and alternative income sources have challenged Bitcoin miners.
Riot has been the worst-performing stock among them all. It was trading at $11.24 at press time, up 2.37% from the previous day.