A heatwave in Texas forces bitcoin miners to shut down their rigs - Riot Blockchain has made more money from electricity credits than it has from mining. Bitcoin mining company Riot Blockchain made more money shutting down its prospecting rigs in July 2022 than it made from new bitcoin over the same period. The reason for this is that Riot had bought electricity in advance, which the company did not need in July - and was thus able to sell it back to the network operators at a premium.
As Bloomberg reports, Riot earned $ 9.5 million in July. With an average price of around $21,600 per bitcoin in July 2022, this corresponds to around 439 bitcoins. At the same time, the company only mined 318 bitcoins, which were worth almost $6.7 million. This is 21 percent less than in June, as the company explains in a press release.
However, the situation should not be regarded as the norm; instead, various factors come together. Texas has been experiencing a severe heat wave since July 2022, prompting companies such as industrial Bitcoin miners to shut down their rigs, at least temporarily. Otherwise, there is a risk that the power grid will collapse under the load, and power failures will occur.
Electricity prices have risen, and the bitcoin price remains low
The power shortage caused electricity prices to rise sharply - together with the currently low Bitcoin prices, this made mining fundamentally unprofitable. However, thanks to the power purchases, Riot was still able to make a profit in this situation.
Riot Blockchain operates a 750-megawatt Bitcoin mining facility in Texas, with another 1-gigawatt facility under construction. In order to be able to survive in the current situation in the crypto market, Riot, like many other miners, also sold Bitcoin from its stock - the company sold 275 Bitcoin in July.