Despite the increase in revenue, Riot maintains its mining activities in the first quarter of 2020 brought in 280 bitcoins, compared to 330 it mined in the first three months of 2019.
In a report the company published on May 8, mining revenues from Bitcoin in the first three months of the year ending March 31, 2020, hit $2.4 million. The company recorded $1.4 million from the same operation in the first quarter of 2019, which puts the latest revenue 70% up, year-on-year.
Riot Blockchain saw its Bitcoin mining revenues soar 70% in the first quarter of 2020, the biotech turned-Bitcoin mining firm has revealed
In a disclosure filed with the U.S. Securities and Exchanges Commission (SEC), Riot Blockchain has disclosed that its revenue from Bitcoin mining went up 70% in the first quarter of 2020.
The revenue is therefore down to the uptick in Bitcoin’s price. In 2019, Bitcoin’s value in the first three months fluctuated around $3,790 after the top crypto’s crash of 2018/2019.
However, in 2020, BTC prices averaged $8,287, which brought in more from the 280 minted coins.
The company has also attributed the increased revenue to stabilized mining costs year-on-year. According to the company, costs have been around $1.4 million in Q1 2020, while 2019 saw the costs range around $1.5 million. These costs were primarily related to the company’s mining operations comprising mainly rent and utilities, the firm noted.
In other expenses, depreciation of hardware rose by $0.6 million in the quarter in question compared to the same period in 2019. A similar scenario was recorded in the company’s general and administrative expenses, with Q1 seeing this cost go up 18% over that of 2019.
Riot Blockchain rebranded to venture into crypto mining, including the term blockchain in its business name. That prompted the SEC which began investigations into the firm’s operations.
At the time of its name change, the crypto space was seeing massive hype as Bitcoin and other crypto rallied to record blockbuster prices. According to the SEC, the rebranding, therefore, warranted added scrutiny as it meant the firm could have been out to capitalize on crypto’s hype to inflate the company’s share prices.
The investigation into Riot Blockchain, however, ended in February this year, with the regulator not making any further recommendations regarding the matter.
The strong performance for the company’s Q1 2020 results is indicative of its robust business operations since switching to mining.
Riot Blockchain Plans Sale of Crypto Exchange as It Invests More Millions in Bitcoin Mining
Nasdaq-listed Riot Blockchain plans to sell its cryptocurrency exchange RiotX while doubling down on its bitcoin mining businesses.
In an announcement on Thursday, the company said it is considering opportunities to divest itself of the limited assets associated with the exchange, launched in early 2018, due to the regulatory environment, security risks and competition from peers.
“In order to concentrate its focus on cryptocurrency mining, Riot has opted to sunset further development of Riot’s U.S.-based digital currency exchange”, the company said in a statement.
Riot has hired Chicago-based investment bank XMS Capital Partners to advise on potential strategic deals and the search for new growth opportunities.
The announcement came on the heels of Colorado-based Riot’s mining expansion in Oklahoma City. Riot installed an additional 1,060 Antminer S17 Pro devices from Bitmain on Feb. 11.
Previously, the company deployed 3,000 of the same AntmMiner model in January, having announced in December it would purchase 4,000 of the mining machines from Bitmain for $6.35 million. The firm expects to boost its bitcoin computing power by 240 percent with the latest additions.
While it dedicates hashing power to a variety of cryptocurrencies including bitcoin (BTC), bitcoin cash (BCH) and litecoin (LTC), Riot will sharpen its focus on bitcoin mining in the future, the company said.
Riot’s stock was trading at $1.42, down 5.33 percent, as of the Thursday market close after announcing the increased focus on bitcoin mining, according to data from Yahoo Finance.
Riot was originally a biotechnology company and it pivoted to blockchain in October 2017. The company changed its name from Bioptix to Riot Blockchain. During the transition, it had considered business opportunities in banking, cryptocurrency trading and digital wallets.
The firm’s expansion comes before bitcoin’s supply-cutting “halving” event in May 2020 – a programmed in reduction in the rewards given to miners that is expected by many (but not all) to bring a boost to the price of the cryptocurrency.