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% because of “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, that means the merge occasion might result in a 60% loss in its working money circulate.
Hive pivots to ETC and Bitcoin mining
The agency has began mining Ethereum Traditional (ETC) to treatment the loss. However its foremost focus is to repurpose its Ethereum mining services for BTC mining and improve capability from 2.8 EH/s to three.3 by February 2023.
With the miner now wanting to enter sustainable Bitcoin mining, Hashrate Index examined its funds to see if it could actually make this transfer.
Hive funds stay robust
In line 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 need to spend a lot on debt servicing and might protect money flows, which can assist its liquidity.
In total 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 high 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 value $57 million and represents 88% of its liquidity.
The corporate additionally has comparatively robust gross margins because of its mining operations’ reliance on geothermal and hydro-powered grids. These grids are usually not uncovered to rising power prices and have lesser downtime.
Hashrate Index wrote that the agency has been in a position to mine extra effectively, producing between 5% and 30% extra BTC than opponents, primarily due to its constant hydropower provide.
Moreover, the miner has been in a position to preserve administrative prices low in comparison with opponents 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 dealing with increased working prices because of debt servicing.