Crypto mining firm Bitfarms reports $18M loss, plans Toronto listing

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Israeli crypto mining firm Bitfarms is coming off a very difficult year in which the bear market drove it to a huge loss. Having started the year well, the company eventually succumbed to the crypto winter. In 2018, Bitfarms posted an $18.2 million loss.

Announcing its financial results yesterday, the company revealed that despite the bear market, it made big moves last year. It merged with Backbone Hosting Solutions back in April to form Bitfarms. Before the merger, it operated under the name Blockchain Mining. It also acquired Volta Electrique, an electrical services company based in Quebec, Canada. It invested heavily in its crypto mining operations, buying and installing over 6,500 ASICs in Quebec.

However, the price of most cryptos took a nosedive last year. Consequently, Bitfarms registered a $23.1 million loss in the second half of the year. Revenue nearly halved to $11.5 million in the second half of the year, having stood at $22.3 million in the first half. According to Bitfarms, this was due to an 81 percent increase in mining difficulty and the decline in the price of Bitcoin Core (BTC), which generates most of its profits.

The financial results also revealed that the company had mined 3,252 BTC, 2,577 Bitcoin Cash (BCHABC), 6,234 Litecoin, 611 Dash and 964 Ethereum.

Bitfarm’s CFO John Rims explained:

“2018 was a volatile year for the cryptocurrency industry and crypto miners. From the beginning of 2018 to December 31st, the price of Bitcoin decreased by 73% while network difficulty increased by 288% to its peak in October 2018.”

Nevertheless, Rims believes that 2018 was a good year for the company. By reinvesting in its operations and through disciplined execution, the company achieved many of its objectives, he said. And the future is looking bright as well, he added, “With our recently secured $20 million debt facility, we are well-positioned to continue our growth and build upon Bitfarms’ strong position in the crypto mining space.”

According to Israeli publication Globes, Bitfarms filed a preliminary prospectus with the Ontario Securities Commission with a view to listing on the Toronto Stock Exchange. The transition to the TSX is contingent on regulatory, shareholder and court approval of a deal with a newly created Canadian company. 

The crypto mining industry has been struggling in the past year, with many miners being forced to close shop. Even the largest ASIC manufacturer hasn’t been immune to the difficult market. Bitmain’s IPO on the Hong Kong Stock Exchange expired a week ago, a reflection of just how hard the company is having it.