Bitcoin (BTC) mining analyst Jaran Mellerud estimated that the Ethereum (ETH) merge may need led to a 40% drop in Hive Blockchain’s income.
Hive simply misplaced its ether mining money cow.
I estimate its revenues to have fallen by 40% attributable to “the merge”. pic.twitter.com/1vq0U6EUze
— Jaran Mellerud (@JMellerud) December 5, 2022
Mellerud highlighted that the mining agency’s ETH enterprise was extra worthwhile than its Bitcoin actions, which means the merge occasion might result in a 60% loss in its working money stream.
Hive pivots to ETC and Bitcoin mining
The agency has began mining Ethereum Traditional (ETC) to treatment the loss. However its important focus is to repurpose its Ethereum mining amenities for BTC mining and improve capability from 2.8 EH/s to three.3 by February 2023.
With the miner now trying to enter sustainable Bitcoin mining, Hashrate Index examined its funds to see if it will probably make this transfer.
Hive funds stay sturdy
In accordance with Hashrate Index, the corporate’s stability sheet appears to be like comparatively steady, with solely $26 million in interest-bearing money owed. This implies the corporate doesn’t must spend a lot on debt servicing and might protect money flows, which is able to assist its liquidity.
In general liquidity, the agency has one of many lowest debt-to-equity ratios amongst public miners and has a fast ratio of three for its stability sheet liquidity. Solely 4 different public miners within the prime 15 by enterprise worth have a extra liquid stability sheet.
Its liquidity is generally in its 3,311 Bitcoin holdings, with solely $8 million in money. On the present worth, Hive’s BTC holding is price $57 million and represents 88% of its liquidity.
The corporate additionally has comparatively sturdy gross margins attributable to its mining operations’ reliance on geothermal and hydro-powered grids. These grids aren’t uncovered to rising power prices and have lesser downtime.
Hashrate Index wrote that the agency has been capable of mine extra effectively, producing between 5% and 30% extra BTC than rivals, primarily due to its constant hydropower provide.
Moreover, the miner has been capable of preserve administrative prices low in comparison with rivals like Marathon.
In the meantime, the huge decline within the worth of Bitcoin, coupled with excessive power prices and elevated mining issue, has made BTC mining unprofitable for many miners going through increased working prices attributable to debt servicing.