Bitcoin public mining companies have been struggling with other crypto markets. As Bitcoin prices fall, these companies' cash flow is all falling, driving to the brink of bankruptcy. However, while the losses suffered by public BTC miners appear to be occurring in bear market operation, it can even be traced back to the previous generation.
Bitcoin miners are almost no profit
Last year, public Bitcoin miners, large and small, were becoming more and more popular. Their stocks allow investors to bet on the cryptocurrency market without buying any digital assets themselves. As a result, these public miners earn millions of dollars. The problem comes from these companies’ ability to actually retain their gains throughout their lives.
Retained earnings are how companies display their total cumulative net income over their life cycle and look at the financial statements of these public miners, which are not encouraging. They show that most public Bitcoin miners have not been able to retain any net gains since their inception.
One obvious question for these miners is how much of their income is used for administrative expenses. The report shows that bitcoin mines spend on average 50% of their revenues on management costs compared to their peers in the gold and oil and gas industry.
Public miners see deficit | Source: Arcane Research
In addition, these companies promised extensive expansion plans during the bull market, which became more difficult to achieve in bear markets. This has resulted in a sharp drop in retained income for most public miners.
Is any mining company profitable?
Over time, even during these difficult times, some public Bitcoin miners were able to go against the trend and keep their retained earnings green. One of them is Argo Blockchain Mining Company. In a report by Arcane Research, Argo Blockchain was listed as the only public BTC miner with $26 million of retained earnings. The rest of the report depicts the grim situation in the Bitcoin mining industry.
Most companies have significant deficits of varying degrees throughout their life cycle. The largest deficit recorded by Core Scientific is $1.304 billion. Next is Riot Blockchain, which has seen a massive $569 million deficit over its life cycle.
BTC holds over $19,000 | Source: BT
on TradingView.com Other companies on the list include Marathon Digital, Hut 8 and Stronghold with deficits of $357 million, $221 million and $156 million, respectively. The other two, CleanSpark and Bitframs, had deficits of $154 million and $137 million, respectively.
This shows that these companies spend more money than they earn during this time. Data shows that even during the bull market, when BTC mining machines have high cash flow , most of these companies continue to lose money. Therefore, investing in the stocks of these companies should be cautious and properly managed risk.
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