For the second quarter of 2024, Riot Platforms (RIOT), a well-known Bitcoin mining company with headquarters in Castle Rock, Colorado, announced a notable rise in losses. Comparing the same period previous year, the company’s net loss more than tripled to $84.4 million, or $0.32 per share. A 48% increase in general operating expenses is mostly to blame for the spike in losses.
The selling, general, and administrative costs of the company amounted to $61.2 million, of which the costs of stock compensation accounted for more than half ($32.1 million). These costs are connected to fresh subsidies given out as part of Riot’s extended incentive scheme. In addition, a significant $76.4 million decline in Riot’s fair value of its Bitcoin holdings compounded the net loss for the second quarter.
The recent Bitcoin halving in April has further impacted Riot’s operations. This event, which reduces the reward for adding new blocks to the Bitcoin blockchain by 50%, has led to a notable decline in Bitcoin production. Riot mined 844 BTC in the quarter, a significant 52% drop compared to the previous year’s second quarter.
Furthermore, the cost to mine each Bitcoin surged to $25,327 from $5,734, driven by a 68% increase in the network’s hashrate. The hashrate, a measure of total computational power used for transaction processing, requires miners to allocate more power, resulting in higher operational expenses to produce each BTC.