Arcane Research tells of major losses of mining companies

Among the firms studied, only Argo Blockchain showed positive indicators

28.09.2022 - 10:45

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2 min

What’s new? According to a study by analytics firm Arcane Research, most cryptocurrency mining companies are suffering losses due to the ongoing downturn in the digital asset market. Experts examined the financial statements of Argo Blockchain, Bitfarms, CleanSpark, Stronghold, Hut 8 Mining, Marathon Digital Holdings, Riot Blockchain, and Core Scientific. That said, only the first company on the list had $26 million in undistributed profits. The remaining mining firms had retained losses ranging from $137 million to $1,3 billion.

The company’s report

What else does the study say? Analysts attributed this situation to the emergence of high administrative costs, failed bitcoin investments, and over-expansion during the bull cycle of 2021. The experts also noted that most of the companies on the list “have been losing money for years.”

In this, Arcane Research estimates that BTC production margins were as high as 1260% in 2021, and had already shrunk to 85% in 2022.

“This should be a warning that costs may be spiraling out of control in some of these companies. Adopting appropriate risk management strategies and reducing administrative costs should get priority,” the analysts said.

Earlier, one of the largest mining pools, Poolin, which stated liquidity problems on September 5, announced the issuance of IOU (I Owe You) tokens. By doing so, the company wants to restore withdrawals from the platform. A total of six “debt” assets will be issued for BTC, ETH, USDT, LTC, ZEC, and DOGE.

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