A publicly listed Bitcoin (BTC) miner from Wall Street, BitFuFu Inc. (NASDAQ: FUFU), has reported
a significant increase in crypto mining costs and a sharp decline in net income
for the second quarter of 2024, despite strong revenue growth.
Bitcoin Miner BitFuFu
Reports Surging Costs, Lower Profits in Q2
The
company’s cost to mine one Bitcoin from self-mining operations soared to
$51,887 in Q2 2024, up from $19,344 in the same period last year. This 168%
increase in mining costs comes as the cryptocurrency industry grapples with
higher energy prices and increased mining difficulty following the Bitcoin
halving event in April.
Despite a
69.7% year-over-year (YoY) increase in total revenue to $129.4 million,
BitFuFu’s net income fell to $1.3 million in Q2 2024, compared to $5.1 million
in the same quarter of 2023. The company attributed this decline partly to a
non-cash unrealized fair value loss of $16.4 million on its Bitcoin holdings.
However, Calla
Zhao, BitFuFu’s Chief Financial Officer, claims that the company maintained a healthy balance sheet with a net cash position of $52.5 million, “which
provides a solid foundation to execute on our growth strategy.”
The
company’s Bitcoin production from self-mining operations decreased by 23.1% to
780 BTCs in Q2 2024, down from 1,014 BTCs in the same period last year. This
decline was primarily due to the increase in blockchain difficulty for Bitcoin
mining and the impact of the halving event.
Recently,
two other mining companies also published their financial data for Q2 2024. In
their case, however, the struggle with the negative effects of the halving
appears to be more successful. HIVE Digital increased its revenue by 37% and
TeraWulf by 130%.
Net profits
also rose, as both companies have decided to move towards supporting AI and
high-performance computing. According to VanEck analysis, an increasing number
of companies in the industry are doing this, eyeing a $38 billion opportunity.
Cloud-Mining Operations Up
Despite
these challenges, BitFuFu reported strong growth in its cloud-mining business,
with registered users increasing 86.8% YoY to 395,056.
“We saw a
substantial increase in our cloud-mining registered user base, surpassing
395,000 users as of June 30,” commented Leo Lu, Chairman and Chief Executive
Officer of BitFuFu. “This represents an 87% increase year-over-year and a 23%
rise sequentially from the first quarter of 2024.”
🌟 $FUFU‘s Q2 2024 Milestones! 📊Our hosting capacity jumped…
