Mining Giants, $850 Million 'Deficit' Due to Bitcoin Decline

▲ Bitcoin (BTC) Mining / AI Generated Image

The decline in Bitcoin (BTC) prices directly hit the performance of major mining companies. The combined quarterly net losses of MARA Holdings (MARA) and CleanSpark (CLSK) amounted to $851.1 million.

According to crypto media outlet BeInCrypto on August 7 (local time), MARA Holdings recorded a net loss of $611.3 million in the second quarter. Net loss per share was $1.6. In the same period last year, it posted a net profit of $808.2 million. Revenue fell by 27% to $174.9 million, falling short of market expectations. MARA Holdings stated that approximately $343 million of the loss was related to the decline in the market valuation of its held Bitcoin.

CleanSpark's revenue in the third quarter of its fiscal year also fell by 30.5% compared to the same period last year, totaling $138 million. The net loss was $239.8 million, turning from a net profit in the same period last year to a deficit. Adjusted EBITDA recorded a deficit of $113 million. Fair value losses on Bitcoin also exceeded $116 million. Of the two companies' quarterly net losses, Bitcoin fair value impairment losses accounted for approximately $459 million.

Despite the deteriorating performance, both companies are accelerating the expansion of their artificial intelligence (AI) and data center businesses. CleanSpark signed a 20-year lease agreement worth $6.6 billion in Sandersville. MARA Holdings operates 19 data centers and holds rights to a 2GW site in Texas. Fred Thiel, Chairman and CEO of MARA Holdings, stated, "We do not view Bitcoin mining and AI infrastructure as competing businesses. The two businesses are complementary fields that utilize the same underlying asset: power."

Other Bitcoin miners are also shifting their focus to AI and high-performance computing (HPC) businesses. TeraWulf (WULF) generated 71% of its total $44.8 million revenue from high-performance computing leases. The contractual revenue from a 20-year lease agreement with Anthropic is approximately $19 billion. Core Scientific (CORZ) reported $164.2 million in revenue and $1.155 billion in losses. The company also disclosed an AMD contract that includes up to 2.5GW capacity. A significant portion of the revenue from AI lease agreements is expected to be recognized over the coming years.

[Article Key Summary]

-The combined quarterly net losses of MARA Holdings and CleanSpark amounted to $851.1 million.

-The Bitcoin fair value impairment losses for the two companies reached approximately $459 million.

-Mining companies are expanding their AI and data center businesses in response to the weakening profitability of Bitcoin mining.

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