Crypto Mining Firm Bitfarms Reports Profits in H1 2018, Despite Market Decline

Francisco Memoria
  • Crypto mining firm Bitfarms reportedly managed to turn a profit in the first half otf this year.
  • This, despite a massive drop in the price of most cryptocurrencies, and an increasing in their mining difficulty.

Bitfarms Technologies, a Montreal and Israel-based crypto mining firm, previously known as Blockchain Mining, managed to turn a profit this year, despite the steep decline crypto markets have endured.

The firm, listed on the Tel Aviv Stock Exchange, reportedly had a break-even mining electricity cost for one BTC of $1,567, well below estimates that suggest it should cost over $6,000 to mine one bitcoin in Israel and nearly $4,000 in Canada.

Bitfarms’ financial results for the first half of this year, first spotted by Finance Magnates, show it made a net income of $4.9 million and a consolidated revenue of $22.3 million. Its gross profit was of $12.5 million, as its gross profit margin was of 56%.

During said period, the company reportedly managed to mine 1,923 bitcoins, 2,222 bitcoin cash, 3,324 litecoins, 567 ethereum, and 220 dash. The bitcoins it mined account for nearly 78% of the total value of the cryptocurrencies it created, while bitcoin cash’s share was of 17 percent.

The company’s performance is notable given the sharp decline crypto markets have seen since December of last year, when most cryptocurrencies hit their all-time highs. Bitcoin, the flagship cryptocurrency, saw its price drop from a near $20,000 all-time high to about $6,950 at press time, according to CryptoCompare data.

Bitfarms’ stock price on the Tel Aviv Stock Exchange notably surged nearly 50% before it published its financials, but oddly dropped over 5% after they were published. According to Yahoo! Finance, Bitfarms’ shares are trading at about $500.

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During the second half of 2017, the company reported a gross profit margin of 84%, along with a net income of $4.9 million on $8.6 million of revenue. Its profit margin’s decline was, per the company, caused by an increase in mining difficulty, coupled with the cryptocurrency price declines.

As CryptoGlobe covered, bitcoin’s increasing hashrate has forced cloud mining company Genesis Mining to offer users discounted contract upgrades to avoid their termination, after surging to 51 exahash, up from 7.1 exahash 12 months ago.

Despite the hashrate’s surge, the cryptocurrency’s price has been struggling to surpass $7,000. Notably Max Keiser, a well-known bitcoin bull, has made a bullish prediction regarding BTC, as he noted its ”price follows hashrate,” hinting at a potential breakout in the future.