Bitcoin Halving Will Affect Miner Riot’s Revenues by 43% Despite New Facilities
Bitcoin (BTC) mining company Riot Platforms produced 215 BTC in May, a 43% decrease from the previous month.
The decline in mining revenue has a direct impact on the mining industry due to the Bitcoin halving on April 20, which saw mining rewards halved to 3.125 BTC.
In anticipation of this decline, Riot pre-planned infrastructure upgrades to sustain Bitcoin production after halving it.
Last May, Riot launched a new Bitcoin mining facility in Corsicana, Texas. The facility adds 3.1 exahashes per second (EH/s), bringing Riot’s total self-mining capacity to 14.7 EH/s. This is a 17% increase from the previous month.
The mining facility currently operates at 100 megawatts (MW) and will eventually expand to 1 gigawatt (1,000 MW) when fully developed.
Developing infrastructure to increase hash rate
Riot is targeting a total hashrate capacity of 31EH/s by the end of 2024 and 41EH/s by 2025. To this end, the company has entered into a long-term master purchase agreement with MicroBT. The new facility will accommodate 33,280 miners.
The strategy adopted by Riot is designed to ensure profitability, especially during bear markets.
Power and Demand Response Credits
In addition to upgrading to highly efficient mining equipment, Riot has adopted a new strategy to lower operating costs, Riot CEO Jason Les explained:
“Riot’s unique power strategy, which we typically use most actively during the summer months, has already begun to show significant results this year, including generating approximately $7.3 million in power and demand response credits in May of this year.”
Related: Bitcoin halving caused Bitfarms’ BTC mining revenue to plummet.
On May 28, Riot Platforms announced an offer to acquire rival Bitfarms at a significant premium to its stock price.
At the time of the proposal, Riot was already Bitfarms’ largest shareholder, holding a 9.25% stake. The acquisition offer includes cash and common stock, valuing shareholders’ equity at $950 million, representing a 24% premium to Bitfarms’ one-month volume-weighted average share price as of May 24.
The proposal comes as Bitfarms’ management searches for a new CEO.
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