Canadian cryptocurrency mining firm Hut 8 has reported huge losses running to $136 million for 2018, according to figures from its annual report published on Wednesday.
The mining firm, considered one of the largest publicly traded crypto mining companies in the world, becomes the latest in the sector to report grim trading conditions, as the ongoing depression in Bitcoin Core (BTC) prices continue to weigh on mining firms.
Like others in the industry, including Bitmain, Hut 8 has been forced to rethink its priorities as a result of the losses, with swinging cutbacks needed to manage cash flow throughout the reporting period.
According to the earnings report, the company considers trading to have been so bad that it has done well to survive, with many other businesses in the sector failing as a result of the collapse in demand for BTC.
It noted, “Due to the ‘crypto winter’, which was marked by a declining price for [SegWit] and most cryptocurrencies, 2018 was a challenging year for all cryptocurrency miners. While many miners did not survive, Hut 8 managed its cash and digital assets conservatively to successfully make it through.”
Striking a more optimistic tone, the company said they hoped for a recovery in the sector in the near future.
“Today, Hut 8 is stable and poised to benefit from a recovery in the price of bitcoin. The Company will continue to manage operations prudently and with focus,” the report stated.
COO Andrew Kiguel said that following the downsizing, the company should now be able to find a route to viability, should BTC prices edge upwards.
“Throughout 2018, Hut 8’s average cost per bitcoin was consistently below the market price of bitcoin,” he said. “As we move into 2019, we are poised to improve margins should the price of bitcoin continues to rise, given our cost cutting initiatives undertaken in late 2018.”
The earnings report is only the latest blow to the sector, after over a year of impossible trading conditions for crypto mining companies. While BTC looks to have arrested the worst of the declines, there clearly remains some way to go for firms like Hut 8 to return to profitability.
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