BitFarms, Saint Hyacinthe Quebe LARS HAGBERG/AFP via Getty Images
China's crackdown against cryptocurrency mining opened up new opportunities for miners from outside the region.
The second quarter earnings show that non-Chinese miners have surpassed revenues and produced more Bitcoin during the quarter.
One CEO said that his market share increased in the quarter due to the China crypto mining ban.
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China's crackdown against cryptocurrency mining gave miners in the region enormous opportunities for growth. Production and earnings updates from publicly traded firms reflect this.
Insider reported previously that North American mining companies were anticipating a surge of demand for facility hosting space. They also expected a boost to profit from taking up more of the bitcoin network's hashrate (or measure of computing power contributed to the network via mining) as Chinese miners go offline.
Even though the second quarter earnings were only released after China's ban, they provide a glimpse into the state and future of mining as China's market share spreads around the globe.
Bitfarms, a Canadian mining company, saw its revenue increase 29% quarter-over-quarter in the second quarter 2021. It also mined 26% fewer bitcoins than the previous quarter. Bitfarms produced 391 bitcoins in July, the highest monthly production rate of the year.
Emiliano Grodzki, CEO of Bitfarms, stated that the China crypto-mining ban had resulted in almost half of the network's hash rate being shut down. This allowed his company to grow its market share from 1% to 1.5% at the start of 2021 to over 1.5% now.
Grodzki stated that the China ban allows us to purchase miners at a lower price than in the past, and also to use our infrastructure development and operational capabilities to support our ambitious expansion plans. "We are excited for the months ahead."
Since there is a limit to how many bitcoins can be mined per day, miners must move offline so those still in operation get a bigger share of the profits. According to the Block Crypto, Riot, Marathon and Bitfarms produced an average of 58% more bitcoin in July than June.
Insider was told by Fred Thiel, CEO of Marathon Digital Holdings, that the decrease in Chinese active miners has led to a drop in global hashrate. This had a positive impact on the number blocks we won. The revenue of the US-based company increased by 220% to $29.3million in the second quarter. This is compared with the previous quarter.
Riot Blockchain saw its mining revenue rise by 35% quarter over quarter to record $31.5 million in their most recent quarter.
Marathon Digital Holdings increased its hashrate, or total computing power used to mine bitcoin, by 196% during the second quarter 2021. However, Thiel stated that this was due to the company’s fleet size and not the ban.
According to Zack Voell (Director of Research at Compass Mining), the hashrate and earnings increases experienced by many North American businesses and the positive results were also a result of other factors than the China ban.
According to data from the Cambridge Electricity Index, the US began sweeping up some of the hashrate before June, when China had ordered that mining be stopped.
Riot, for instance, credits a large part of its revenue increase to the fact it used a larger number of high-efficiency mining rigs in the quarter.
You can see the remarkable year-to-date price increases as a sign of the success of these mining companies. The London-based Argo Blockchain is up by 306%. Marathon is at 268% and Bitfarms (220%) are next, Riot (126%), Hut8 (180%) are the others.
