Hong Kong-headquartered crypto miner BIT Mining has reported eye-watering revenue growth in the second quarter of this year, although with an expanding loss as the company pivots its business to crypto mining.
BIT Mining — a New York Stock Exchange-listed company that only months ago became a big investor in Chinese cryptocurrency mining — said in a statement following the release of its second-quarter earnings that it had “completed the transition of its business to an enterprise that covers cryptocurrency mining, data center operation and mining pool.”
In the second quarter of the year, BIT Mining recorded 2.87 billion yuan (US$445.1 million) of net revenue, a huge leap from just 19.6 million yuan in the previous quarter and 3.6 million yuan in the same period of last year, according to its latest quarterly report.
However, the company booked a net loss of 97.9 million yuan attributable to BIT Mining in the second quarter of this year, compared to a net income of 13.2 million yuan in the first quarter and a net loss of 86.3 million yuan in the second quarter of last year.
The loss, the company said, was primarily due to the operating costs of its growing crypto mining business as well as falling market crypto prices during the quarter.
BIT Mining, formerly known as 500.com, an operator of online sports lottery services, announced last month that it had decided to dispose of its lottery business. BIT Mining pivoted its business to crypto mining in December 2020 when Bitcoin was still on a bull run, and in February it announced that it was acquiring the entire mining pool business of BitDeer, operated under BTC.com.
The acquisition, which was completed in April, has brought in much of the company’s revenue. From April 15 to June 30, the mining pool business generated US$422.8 million in revenue, accounting for 95% of the company’s total net revenue for the second quarter, the report shows.
As China continued tightening the screws on the crypto mining sector, BIT Mining was among those businesses moving their mining operations out of China. Some early favorite destinations for displaced Chinese miners have included Kazakhstan, North America and Northern Europe.
BIT Mining has been betting big on Kazakhstan. It said in the Tuesday statement that it had delivered 7,849 Bitcoin mining machines with a total hashrate capacity of 292.7 petahashes per second to the Central Asian nation. Of all the machines there, a total of 3,293 machines had been deployed.
As a result, in the second quarter of the year, the company produced 186 Bitcoins from its mining business, representing about 2.1% of its total net revenue for the quarter.
BIT Mining appears set on global expansion. Last month, it said it had raised US$50 million in a private placement from unnamed institutional and accredited investors to allow it to grow its overseas operations. It has also entered into an agreement to acquire crypto mining machine manufacturer Bee Computing.
Meanwhile, BIT Mining is in the process of building a new data center outside of mainland China, which is expected to commence operation late in the third quarter of this year.
As miners pushed out by China resettle on friendlier shores and resume investing big money in mining equipment, the global Bitcoin hashrate is on an uptrend.
As of Tuesday, the total hashrate reading was at 119.1 million terahashes per second, an increase from 84.79 million on July 3, which was the lowest since September 2019, according to data from Blockchain.com.
Starting in mid-May, soon after China intensified its crackdown on the sector, mining pools began receiving less newly mined Bitcoin, with the weekly volume falling from roughly 10,000 BTC per week to under 5,000, as suggested by a research report released recently by Chainalysis.