Canadian miner Hut 8 Mining Corp has reported that second quarter revenue tumbled 67% to $6.9 million from $21.2 million a year ago, as Bitcoins supply cut in May forced production to decline.<\/p>\n
The Toronto Stock Exchange-listed company extracted just 795 bitcoin (BTC) in the April to June quarter, compared to 1,165 BTC in the preceding three-month period.<\/p>\n
However, Hut 8 posted a net profit of $2.1 million thanks to the revaluation of its bitcoin holdings, which generated $7.6 million.<\/p>\n
Still, Q2 net earnings show a decline of 91% from the $22.7 million reported a year earlier. The firm said profit from mining activities came in at $440,000, down from $13.4 million the year before.<\/p>\n
Altogether, Hut 8 ended the review quarter with 2,954 BTC on its balance sheet.<\/p>\n
Management blamed the decline in profits to the Bitcoin third halving event of May 11, which slashed miner rewards by 50% to 6.25 BTC per block.<\/p>\n
The network difficulty decreased subsequent to the halving by 15%, but quickly returned back to levels prior to the halving, said the company, in its earnings release on August 13.<\/p>\n
This posed a difficult challenge to many bitcoin miners as they saw the bitcoin block reward drop by 50% with similar network difficulty rates meaning that revenue dropped by nearly 50% for all bitcoin miners, including Hut 8, it added.<\/p>\n
During the quarter, Hut 8 raised $6.2 million from a share sale. The funds have been used to buy new mining hardware, which is expected to add 275 petahash per second to the companys existing mining capacity.<\/p>\n
Shares of Hut 8 rose 4.4% to $0.89 in Toronto trading Friday. Over the past 52 weeks, the stock has reached a low of $0.38 and a high of $1.98.<\/p>\n
What do you think and Hut 8s second quarter earnings? Let us know in the comments section below.<\/p>\n
Image Credits: Shutterstock, Pixabay, Wiki Commons<\/p>\n
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