NEW YORK, July 13, 2021 /PRNewswire/ -- Bit Digital, Inc.
(Nasdaq: BTBT) ("Bit Digital" or the "Company"), a bitcoin mining
company headquartered in New York,
announced its unaudited bitcoin production and mining operations
update for the second quarter ended June 30,
2021.
Preliminary Second Quarter 2021 Highlights
- 70.8% of our miner fleet by hash rate was already deployed, in
transit to or awaiting installation in North America at June
30, 2021. Following regulatory changes in China, the Company suspended mining operations
there effective June 21, 2021,
accelerated its migration program to North America, and anticipates completing
migration of its remaining China-based fleet during the third quarter of
2021.
- The Company owned 32,500 miners as of June 30, 2021, with a maximum total hash rate of
1.92 EH/s. The 0.34 EH/s reduction from the first quarter was due
to fleet repositioning, in which the Company sold or disposed of
certain models, in anticipation of purchase opportunities for
newer, more efficient machines. The Company recognized a small gain
on miner sales, and expects to reinvest sale proceeds of $5.4 million into purchases of newer vintage
miners.
- The Company purchased 3,515 miners on the spot market during
the second quarter, and expects to make additional miner purchases
subsequent to quarter end, potentially in significant volumes,
subject to market conditions and capital availability.
- The Company earned 562.9 bitcoins in the second quarter of
2021. The reduction from the first quarter was due to the
accelerated migration program, in which more miners were offline
while in transit to or awaiting installation in North America, as well as miner sales and
disposals.
- Treasury holdings of bitcoin increased to 588.4, with a fair
market value of approximately $20.6
million as of June 30,
2021.
Miner Migration Update
Following the recent announcement of the Chinese government's
decision to ban bitcoin mining, the Company immediately suspended
its remaining mining operations in mainland China, effective June
21, 2021. Accordingly, we further accelerated our migration
strategy to North America, that
had been ongoing since October 2020.
As a result, a greater proportion of the Company's fleet was
offline than in the prior quarter, due to more miners being in
transit to or awaiting installation in North America.
During the quarter, the Company shipped 14,500 miners to
the United States. The Company
expects to complete the migration of its remaining China-based miners to North America early in the third quarter of
2021.
The following table represents our miners' geographic locations
as of June 30, 2021:
Miner Geographic Distribution as of June 30, 2021
Location
|
|
Number of
Miners
|
|
|
Percentage
of Total
Miners
|
|
In transit to or
awaiting installation in U.S.
|
|
|
14,500
|
|
|
|
44.6
|
%
|
United
States
|
|
|
7,090
|
|
|
|
21.8
|
%
|
China
|
|
|
9,484
|
|
|
|
29.2
|
%
|
Canada
|
|
|
1,426
|
|
|
|
4.4
|
%
|
Total
|
|
|
32,500
|
|
|
|
100.00
|
%
|
During the quarter, the Company signed two new hosting
agreements in North America,
representing 60 megawatts of additional hosting power capacity. As
of June 30, 2021, the Company
believes it had secured the majority of hosting capacity required
to complete redeployment of its remaining China-based fleet in North America. The Company continues to
evaluate additional hosting arrangements with existing and new
partners in North America, to
secure additional capacity and in anticipation of an expected
increase in our spot market miner purchase activity and growth of
our miner fleet in the coming months.
Bitcoin Production Update
In the second quarter of 2021, Bit Digital earned 562.9 newly
minted bitcoins, a reduction from 1013.4 earned in the first
quarter. The reduction was due to the aforementioned acceleration
of the Company's miner migration strategy, as well as fleet
repositioning in which the Company sold or disposed of certain
miners. Bitcoin production is expected to increase following
completion of the migration, which is expected during the third
quarter of 2021, and upon completion of anticipated miner purchase
activity.
The Company's quarterly bitcoin
production since commencement of our mining operations was as
follows:
Miner Fleet Update
As of June 30, 2021, the Company
owned 32,500 miners, with a total maximum hash rate of 1.92 EH/S, a
decrease from 40,965 miners and 2.26 EH/s as of March 31, 2021. The reduction was due to sales
and disposals of certain older miners, partially offset by miner
purchases, as further discussed below. The Company's fleet of owned
miners comprised the following models:
Model
|
|
Owned as
of June 30,
2021
|
|
MicroBT Whatsminer
M21S
|
|
|
15,072
|
|
Bitmain Antminer
S17+
|
|
|
7,955
|
|
MicroBT Whatsminer
M20S
|
|
|
3,691
|
|
MicroBT Whatsminer
M10
|
|
|
2,190
|
|
Bitmain Antminer S17
Pro
|
|
|
1,259
|
|
Bitmain Antminer
T3
|
|
|
800
|
|
Bitmain Antminer
T17
|
|
|
700
|
|
MicroBT Whatsminer
M30S
|
|
|
261
|
|
Bitmain Antminer
T17+
|
|
|
256
|
|
Bitmain Antminer S19
Pro
|
|
|
205
|
|
Bitmain Antminer
S17
|
|
|
101
|
|
Bitmain Antminer
S17E
|
|
|
10
|
|
Total
|
|
|
32,500
|
|
Miner Purchases, Sales and Disposals
During the second quarter, we purchased 3,515 miners on the
Chinese spot market, including
1,259 Bitmain S17Pro, 954 MicroBT M20S, 930 Bitmain S17+, 261
MicroBT M30S, 101 Bitmain S17 and 10 Bitmain S17E models. As of
July 11, 2021, 1,678 of the newly
purchased miners had already been deployed in North America and 878 were in transit to
North America.
The Company anticipates a significant opportunity to purchase
additional miners on the Chinese spot market at attractive prices,
potentially in substantial volumes, in the coming months, and
continues to closely monitor market conditions for such purchase
opportunities. Due to spot market disruption following the Chinese
government's ban of bitcoin mining in June
2021, the Company believes there have been significant spot
market pricing reductions, and anticipates an opportunity to make
further purchases of newer-vintage miners in the coming months,
subject to market conditions and capital availability.
During the quarter, we began to reposition our fleet by selling
11,608 miners that were deemed to have a lower expected return on
invested capital than miners we anticipate purchasing in the near
future, and/or were deemed unsuitable for long-distance migration
to North America. The sold miners
included 8,410 Bitmain T17, 1,525 MicroBT M21S, 1,346 MicroBT M20S,
195 Bitmain S17E, 100 MicroBT M31S and 32 Bitmain S17 Pro models.
The Company recorded a small gain on these sales, in aggregate. We
intend to reinvest the net sales proceeds of $5.4 million into purchases of newer, more
efficient models in the coming months.
During the quarter, we abandoned 372 miners in mainland
China that were deemed to have
reached the end of their useful lives, were no longer operational
and/or would have been uneconomical or impossible to repair. The
disposed miners included 320 MicroBT M21S, 42 MicroBT M20S and 10
MicroBT M10 models.
Management Commentary
"Bit Digital faces an unprecedented opportunity to scale its
miner fleet," said Bryan Bullett,
Bit Digital's CEO. "This is driven the historic disruption, in
which we believe that bitcoin mining equipment is flowing onto the
Chinese spot market in large volumes, in the aftermath of
China's recent shutdown of the
sector."
"Bit Digital is uniquely positioned to acquire these miners at
scale. Headquartered in New York
and led by a primarily US-based management team, to our knowledge,
Bit Digital is the only US-listed miner with deep relationships
among the major former Chinese operators. Our team on the ground in
China is positioned to source
equipment and transact with reputable counterparties rapidly, at
scale. As illustration of this capacity, the Company grew to its
current position as one of the largest US-listed miners, primarily
through several large spot market purchases."
"We have been successfully shipping large quantities of miners
purchased in China and redeploying
them in North America since
October 2020, and the recent
regulatory change in China served
as a catalyst to significantly accelerate our miner migration
program. Bit Digital is fortunate, in that we already have in-place
the logistical and technical know-how and relationships that we
believe will enable us to fully complete the migration in during
the third quarter."
"We are also fortunate to have already built strong partnerships
with several high-quality hosting providers in North America. Working with these existing and
new hosting partners, we secured 60 megawatts of additional
capacity, which we believe represents the majority of additional
hosting needed to fully accommodate our current fleet migration to
North America. We are also in
discussions with multiple parties to further expand hosting
capacity, and to facilitate new deployments for anticipated miner
purchase activity."
"We also used the accelerated migration as an opportunity to
reposition our miner fleet, selling machines that we deemed to
represent a lower expected return on invested capital than
newer-vintage machines that we anticipate purchasing in the near
future, at attractive prices. As part of this repositioning, we
culled the majority of our Bitmain T17 miners, which in our view
was among the less desirable models in our fleet. We generated a
small gain on these sales, and intend to reinvest the net proceeds
into purchases of newer, more efficient models."
"Our co-founders had the foresight to acquire miners on the
Chinese spot market at scale, assembling one of the largest
US-listed miner fleets, and to begin the process of migrating those
miners into North America, well in
advance of potential regulatory changes in China. Those regulatory changes have now come
to pass, and we believe that Bit Digital is now uniquely positioned
to emerge as a sustained leader in the US-listed mining sector,
with its operations expected to be entirely North America-based in the near future."
About Bit Digital
Bit Digital, Inc. is a bitcoin mining company headquartered in
New York City with one of the
highest operating hash rates (or computing power) among all US
listed bitcoin miners, and growing. Our operations are in the
United Statesand Canada. For additional information, please contact
Sam Tabar at sam@bit-digital.com or visit our
www.bit-digital.com.
Investor Notice
Investing in our securities involves a high degree of risk.
Before making an investment decision, you should carefully consider
the risks, uncertainties and forward-looking statements described
under "Risk Factors" in Item 3.D of our most recent Annual Report
on Form 20-F for the fiscal year ended December 31, 2020. If any material risk was to
occur, our business, financial condition or results of operations
would likely suffer. In that event, the value of our securities
could decline and you could lose part or all of your investment.
The risks and uncertainties we describe are not the only ones
facing us. Additional risks not presently known to us or that we
currently deem immaterial may also impair our business operations.
In addition, our past financial performance may not be a reliable
indicator of future performance, and historical trends should not
be used to anticipate results in the future. Future changes in the
network-wide mining difficulty rate or Bitcoin hash rate may also
materially affect the future performance of Bit Digital's
production of bitcoin. Additionally, all discussions of financial
metrics assume mining difficulty rates as of June 2021. See "Safe Harbor Statement" below.
Safe Harbor Statement
This press release may contain certain "forward-looking
statements" relating to the business of Bit Digital, Inc., and its
subsidiary companies. All statements, other than statements of
historical fact included herein are "forward-looking statements."
These forward-looking statements are often identified by the use of
forward-looking terminology such as "believes," "expects," or
similar expressions, involving known and unknown risks and
uncertainties. Although the company believes that the expectations
reflected in these forward-looking statements are reasonable, they
do involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect. Investors should not place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. The company's actual
results could differ materially from those anticipated in these
forward-looking statements as a result of a variety of factors,
including those discussed in the company's periodic reports that
are filed with the Securities and Exchange Commission and available
on its website at http://www.sec.gov. All forward-looking
statements attributable to the company or persons acting on its
behalf are expressly qualified in their entirety by these factors.
Other than as required under the securities laws, the company does
not assume a duty to update these forward-looking statements.
[1] Actual operating
hash rate will vary depending on network difficulty rate, total
hash rate of the network, the operations of our facilities and the
status of our miners.
|
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