Companies operating in the crypto-mining sector have not had the best of starts in the last quarter of 2022. Several discouraging reports have come out over the past few days, each of which indicates that the industry has not shaken off the effects of the crypto-winter.
Crypto-mining troubles with Riot Blockchain Inc.
Colorado-based Bitcoin mining firm Riot Blockchain recently held its earnings call for the third quarter of 2022. Needless to say, the firm’s investors were not happy with the numbers they saw for Q3. The QoQ revenue missed estimates by over 17%, coming in at $46.3 million, as compared to an estimated $56.3 million.
CEO Jason Les’s response to the Q3 report on Twitter seemingly withheld the company’s stock from tanking even further. It has already gone down by over 19% over the last five days.
Additionally, our strong liquidity position has enabled us to remain focused on executing our growth plans and achieving new records in hash rate capacity, as we work towards our goal of becoming the world’s leading Bitcoin-driven infrastructure platform.
— Jason Les (@JasonLes_) November 7, 2022
Iris Energy reportedly defaulted on a $103 million loan
The ill-fate of crypto-mining firms is not just limited to the United States. Australian Bitcoin mining firm Iris Energy allegedly defaulted on a $103 million loan that was extended to it for the purchase of equipment.
As per a filing with the U.S Securities and Exchange Commission, the lender alleged that the notice of default was issued against Iris Energy. This, because the mining firm failed to engage in “good faith restructuring discussions” for said debt.
Iris Energy stated last week that its Bitcoin mining machines were pumping out enough money to cover the debt that was extended for their purchase. The company’s share price has tumbled by over 19% over the last five days too.
Argo Blockchain’s liquidity issues
London-based Argo Blockchain is reportedly facing a severe cash crunch. The Bitcoin mining company recently had a $28 million equity infusion, which has evidently failed to keep the company stable.
Argo’s share price lost over 22% of its value over the weekend. At press time, it was trading at £7.54, down 91.6% year-to-date.
The reason behind the poor performance of these mining firms is quite consistent across the board. For starters, Bitcoin mining difficulty is extremely high. This factor has also affected popular names like Core Scientific and Compute North.
Rising energy prices definitely do not help these firms, which are already struggling in the crypto-winter. Increasing expenditure on electricity is shrinking mining margins for these companies too.