2018 was a bad year for crypto miners as a lot of farms had to shut shop amidst declining crypto prices. By the time 2018 ended most crypto miners including larger names were gasping for breath. While things were expected to be good in 2019, the ghost of 2018 still looms on most mining players as they continue to file loses. The recent addition to this list is Canadian company Bitfarms which is on the verge of being delisted from Tel Aviv Stock Exchange.
Stable to Rising crypto prices still keep hopes alive for Crypto miners
Over a couple of months, the prices of all major currencies have been in a stable range. In fact, a few of them have seen occasional spurts on the upside. This flattish to spiking price movement is what is keeping the hopes of crypto miners alive.
While the outlook is still unpredictable, the ghosts of 2018 are still haunting most Crypto mining firms. The recent addition to the list is Bitfarms which was previously known as Blockchain Mining and is currently listed on Tel Aviv Stock Exchange in Israel.
Bitfarms is a Canadian crypto miner which envisions to develop the ecosystem growing around blockchain-based technologies. It is the first public company in the blockchain operation and crypto mining world. While the company had a lot of accolades under its name, its results for Q4 2018 were quite dismal. The corporate highlight presented by the company were
- Consolidated revenue of $33.8 million; gross profit of $10.9 million (32% gross profit margin), operating loss of $18.0 million, EBITDA1 loss of $5.5 million and a net loss of $18.2 million;
- Impairment of property plant and equipment and intangible assets of $19.1 million;
- Mining operations segment revenue of $31.6 million, gross mining profit of $23.2 million (73% gross mining margin), gross profit of $10.3 million (33% gross profit margin), operating loss of $16.5 million, EBITDA loss of $4.0 million and a net loss of $16.6 million;
- Coins minted in 2018: 3,252 Bitcoin, 2,577 Bitcoin Cash, 6,234 Litecoin, 964 Ethereum, and 611 Dash
Despite the dismal performance, the management commentary was pretty optimistic John Rim, Chief Financial Officer of the company stated
“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. Despite the challenges, through continuous reinvestment of cash flow generated from our operations, careful financial planning and disciplined execution, we were able to achieve many operational growth objectives in 2018. We also successfully secured a large pipeline of economical, renewable energy that will allow us to continue to grow and scale going forward. With our recently secured $20M debt facility, we are well-positioned to continue our growth and build upon Bitfarms’ strong position in the crypto mining space,”
The dismal performance might force the company to go off markets in Tel Aviv, it seems to have already filed for Filed a preliminary prospectus with the Ontario Securities Commission in support of the Company’s Canadian Listing Strategy. At Tel Aviv, the company’s share price has risen by nearly 80% since the start of 2018 but is still 90% below the peak to which it soared in December 2017, when Bitcoin was also at a peak.
While the whole of the mining industry is looking for price revivals in the crypto market, not even a single of them is sure how the future lies. One can just keep their fingers crossed and expect things to come out positive.
Will 2019 be the year of crypto mining revival? Do let us know your views on the same.
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.