Bitfarms, a prominent Bitcoin mining company, has reported a significant drop in revenue following the latest Bitcoin halving event.
The company earned $7 million in May, marking a 45% decrease from April. This decline reflects the halving’s impact on mining rewards, where the payout for mining a Bitcoin block is cut in half every four years.
In May, Bitfarms mined 156 BTC, a 42% drop from the previous month and down 66% year-over-year.
Of the mined Bitcoin, the company sold 136 BTC for $8.9 million, down from $16.1 million in April, as part of its treasury management strategy. By the end of May, Bitfarms held 850 BTC in its treasury, valued at $57.2 million.
The average daily Bitcoin production was 5.0 BTC, generating approximately $340,000 per day based on the Bitcoin price of $67,300 on May 31.
This production rate, 24.5 BTC per average exahash per second (EH/s) of computational power, represents a 45% decrease from April due to the post-halving economics.
Despite the revenue drop, Bitfarms continues to upgrade its mining fleet.
Chief Mining Officer Ben Gagnon reported that the company received 25,600 new miners this year, installing 23,600 of them.
The remaining miners are expected to arrive soon, which will boost Bitfarms’ hashing power to 12 EH/s in June.
In a significant development, Bitfarms recently rejected a nearly $1 billion acquisition proposal from Riot Platforms, another major Bitcoin mining firm.
Riot offered to buy all of Bitfarms’ outstanding shares at $2.30 each, a 24% premium on the one-month weighted average.
Although Bitfarms turned down the offer, Riot has since acquired a 9.25% stake in the company, becoming its largest shareholder.
Juan Leon, Senior Crypto Research Analyst at Bitwise, noted that a merger between Bitfarms and Riot could result in a combined self-mining capacity of 52 EH/s by the end of 2024, spanning 15 sites globally.
This potential consolidation raises questions about the future landscape of the Bitcoin mining industry.
Bitfarms is also navigating internal challenges following the dismissal of former CEO Geoffrey Morphy.
Morphy has filed a $27 million lawsuit against the company, alleging breach of contract and wrongful dismissal. This legal battle adds another layer of complexity to Bitfarms’ current situation.
Despite these hurdles, Bitfarms’ stock has seen a slight uptick, trading 4% higher at $2.33 per share. However, the stock is down 18% year-to-date. Founded in 2017, Bitfarms operates 12 Bitcoin mining facilities across Argentina, Canada, Paraguay, and the United States, with another facility under development.