Miners lean on BTC price rise, manufacturing, HPC

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Block reward miners continue to struggle despite a BTC bull market, pushing them into the open arms of artificial intelligence (AI) and other high-performance computing (HPC) data center operations.

• Q2: it was the best of times, it was the worst of times
• Google puts billions into Terawulf
• Block’s Proto mining rig takes on China
• Hood County, Texas takes on MARA (again)
• Texas says terrorists are targeting mining ops

A flurry of new Q2 earnings reports show many miners would be in deep doodoo without (a) the rise in the price of the BTC token, (b) diversification into HPC activities, and/or (c) their ability to sell ASIC (Application-Specific Integrated Circuit) mining rigs to their rivals.

Bitdeer (NASDAQ: BTDR) saw its net loss soar to $147.7 million in the three months ending June 30, significantly worse than the $17.7 million loss in the same period last year. It bears noting that $108.5 million of this loss was non-cash fair value changes in its derivative liabilities.

Bitdeer’s revenue rose 57% year-on-year to $155.6 million, driven by gains in self-mining revenue ($59.3 million, +44%) and external sales of its new SEALMINER mining rigs ($69.5 million). But the cost of revenue nearly doubled to $142.8 million due to higher electricity costs and depreciation of existing ASICs.

Bitdeer has undergone a transformation over the past year as its cloud mining and hosting units experienced significant retrenchment due to expiring contracts and the company refocusing on self-mining. Hosting customers who were running older, less efficient rigs largely dropped out when block rewards were cut in half by the April 2024 halving event.

But Bitdeer’s future looks bright, as July’s self-mining production was up 39% from June to 282 BTC, as hashrate spiked nearly six points to 22.3 EH/s, and the number of self-owned rigs in action rose by 13,000 to 127,000. Bitdeer ended July with a BTC treasury of 1,667 tokens, 165 more than June’s total.

Singapore-based BitFuFu (NASDAQ: FUFU) saw its Q2 revenue slip nearly 11% year-on-year to $115.4 million, although this represented a 48% rise from Q1-25. Profits hit $47.1 million, a significant rise from Q2-24’s $1.3 million, although that year’s figure was dragged down by a $16.4 million unrealized loss from BTC’s price decline, while this year’s profits were goosed by $39.6 million from BTC’s price rise.

BitFuFu’s total mining capacity jumped 11.5 points year-on-year to 36.2 EH/s, helping to boost the number of cloud-mining registered users by 57.7% to over 623,000 as of June 30. Revenue from mining rig sales hit $5.2 million in Q2, up from just $100,000 a year ago, prompting BitFuFu to leverage its strategic partnerships to further boost this growing vertical.

Canaan Inc (NASDAQ: CAN) reported revenue of $100.2 million (+39.5% year-on-year), of which mining rig product sales accounted for $71.9 million (+16.3%) and mining revenue was $28.1 million (+201.6%). But the cost of mining ($32 million) exceeded mining revenue due to higher electricity charges and depreciation of older rigs. The net result was a loss of $11.1 million, which is still significantly better than Q2-24’s $41.9 million loss.

Canaan CEO/chairman Nangeng Zhang said his company had managed to diversify its sales footprint amid the U.S. tariff “challenges.” But with “localized production now running” in the U.S., Canaan has “fortified supply agility and regional resilience, winning recurring orders from top-tier U.S. miners in this quarter, including Cipher Mining Inc. (NASDAQ: CIFR) and CleanSpark (NASDAQ: CLSK).”

Hive Digital (TSXV: HIVE) reported revenue of $45.6 million (+41.5% year-on-year) in the three months ending June 30 (Hive’s fiscal Q1), of which $40.8 million came from mining and $4.8 million for HPC hosting. Both figures represent new company highs.

Hive booked a profit of $35 million for the quarter, although this was seriously wind-assisted by $23.2 million from gains in the value of its BTC treasury, $8.2 million from gains in equity investments, and $16.4 million from the change in fair value of its derivative assets.

Bitfarms (NASDAQ: BITF) reported Q2 revenue of $78 million, up 87% year-on-year, but booked a net loss of $29 million. The red ink was partly blamed on its previous decision to wind down much of its mining operations amid its transition to a “leading North American energy and compute infrastructure company.”

Earlier this year, Bitfarms divested its Yguazu, Paraguay mining site because of its unsuitability to transition to HPC tasks. During Q2, Bitfarms discontinued its Argentina mining operations and “completed all planned Bitcoin mining growth initiatives” with “no plans for additional miner purchases at this time.” Bitfarms is also actively flogging $25 million worth of used ASICs if anyone’s interested.

(On a related note, Riot Platforms (NASDAQ: RIOT) just revealed that its stake in Bitfarms dropped to 4.6% as of August 18, down from 9.85% on July 16. At one point last year, Riot held nearly one-fifth of Bitfarms, but the 11 million shares unloaded on August 18 make it plain that these star-crossed lovers are well over each other.)

Like Bitfarms, Core Scientific (NASDAQ: CORZ) is still technically a miner but is also “in the process of allocating and converting a significant portion of our nine operational data centers … to support AI-related workloads.” This process will only accelerate as Core is absorbed by AI/cloud infrastructure provider Coreweave.

Core generated revenue of $78.6 million in Q2, barely half the $141 million from the same quarter last year, reflecting the transition away from mining. While the declines were laid at mining’s door, ‘colocation’ aka HPC hosting revenue nearly doubled to $10.6 million over the same span.

TeraWulf gets Google(y) eyed

The top-up is part of project-related debt financing, in this case, the expansion of Terawulf’s Lake Mariner data center in western New York. The expansion, in service of two 10-year deals with AI cloud provider Fluidstack, will add 160MW of critical IT load when it launches operations in H2-26, boosting the Lake Mariner site’s total capacity to 360MW.

News of the Fluidstack deals sent TeraWulf’s share price soaring last week, nearly doubling to $10.71. The shares have since shed some of those gains but closed Tuesday at $8.78, down 6.4% but still well ahead of last week’s ~$5.50 mark.

On August 18, TeraWulf used its momentum to announce plans to raise $400m in new debt, then boosted this figure to $850 million the same day. TeraWulf plans to use the bulk of the proceeds to finance its ongoing data center expansions.

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Block takes aim at China’s mining rig dominance

The U.S. tariffs imposed on foreign-made ASICs have led the Chinese companies that dominate ASIC manufacturing (Bitmain, MicroBT, and Canaan) to start down the road toward full-blown U.S.-based production.

These companies now have a new ‘Made in America’ challenger in the form of Jack Dorsey’s payment processing company Block (NASDAQ: SQ) and its new Proto Global ‘decentralized mining’ division.

On August 14, Block unveiled its new Proto Rig modular mining system alongside Proto Fleet, the related free/open-source software. Block claims Proto Rig “delivers 1.5 times the power per foot of rack space compared to traditional mining hardware.” Proto Rigs are already in use at the Dalton, Georgia facility of Core Scientific, with which Block struck a supply agreement last year.

Proto Rig’s cost-effective design allows mining operators to swap out individual hashboards without having to replace the whole unit. Block claims this will more than double the current maximum life cycle of the units while reducing upgrade costs by 15-20% per cycle. Repairs require no tools and can be done without removing each unit, perks that Block claims will dramatically reduce man-hours.

The day before the official announcement, an online commenter wondered if Dorsey and Proto had “out engineered China on these Bitcoin mining chips.” The traditionally taciturn Dorsey replied in the affirmative, saying “we have.”

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Everything’s messier in Texas

While a ‘Made in America’ approach may cheer some ‘Muricans, others wish they’d never heard of block reward mining. This includes the unfortunate residents who live adjacent to massive mining facilities and must endure the constant drone from the thousands of fans required to keep the rigs from overheating.

For years now, residents in Hood County, Texas, have been waging war with a mining facility currently operated by MARA (NASDAQ: MARA). This summer, rural residents of unincorporated Mitchell Bend launched a bid to incorporate their community in order to gain greater control over local land use, including the ability to approve noise ordinances.

That bid went down to defeat last week after a county judge ruled that not enough registered voters had signed their names to the ballot petition. While the petition had originally been approved by the same judge, MARA attorneys challenged this approval, citing ‘signature deficiencies.’

Undaunted, the residents filed another petition that was approved. The roughly 250 voters of Mitchell Bend’s 600-odd residents will now have their say on incorporation in a special election on November 4.

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Terrorists v. miners

Noise isn’t the only thorny issue impacting the state’s mining industry. Some local reporters’ requests for information on mining operations from the Public Utility Commission of Texas (PUC) have sparked a legal war between the utility and the Texas Attorney General’s office.

Under a 2023 state law, mining facilities that draw more than 75MW of power were required to register with PUC by February 2025. When reporters asked to see the data in those registrations, PUC denied the requests. The reporters appealed to the AG, who sided with the reporters and told PUC to release the data.

Instead, PUC sued AG Ken Paxton in June, claiming that the mining data—location, size, and details of each facility’s energy demands—“could be used by terrorists to plan attacks on Texas’s energy grid and critical infrastructure.” This allegedly could be accomplished “through manipulation of the volume of available reliable electricity.”

PUC’s reasoning has been mocked by those who note that data on state power plants—the very definition of critical infrastructure—is publicly available. The Electric Reliability Council of Texas (ERCOT), the entity that oversees the Texas grid, declined to answer reporters’ questions as to whether mining facilities count as critical infrastructure.

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