BTC Miner Hut 8 Doubles 2022 Net Loss to $176 Million

Thursday, 09/03/2023 | 12:56 GMT by Damian Chmiel

Despite higher Bitcoin production, Hut 8 felt the rising costs and lowering BTC prices.

BTC miner joins its competitors and increases the overall net loss.

Hut 8 Mining Corp., one of North America's largest publicly-listed mining companies, recently announced its financial results for the year and quarter that ended 31 December 2022. Despite the challenging times that the digital asset mining industry experienced, Hut 8 managed to maintain stable revenues. However, the total net loss widened significantly to CAD 242.81 million, showing how cryptocurrency winter made crypto miners' life miserable in 2022.

Hut 8 Doubles Net Loss in 2022

Hut 8 revenue decreased by CAD 23.1 million to CAD 150.7 million during the year ended 31 December 2022, compared to CAD 173.8 million reported a year earlier. However, the company mined 3,568 Bitcoin (BTC) in 2022, which was a 28.1% increase compared to 2021 due to the rise in hashrate from the expansion of the company's fleet of miners and mining activities. Hut 8 installed an aggregate of 21,455 new MicroBT miners at its three mining sites during a period of twelve reported months.

However, the increasing number of Bitcoin mined and the relatively small decrease in revenue did not translate positively into a net result. The company was already reporting a net loss of CAD 72.7 million in 2021, and the value has more than doubled to CAD 242.8 million ($176 million). Net loss per share came in at CAD 1.29 compared to CAD 0.54 reported in the same period a year earlier.

According to Hut 8, the decrease in Bitcoin price during 2022 resulted in a net loss of CAD 134.8 million. This was due to a combination of factors, including lower revenue from digital asset mining operations, higher cost of revenue, and CAD 113.9 million of impairment on digital asset mining CGUs and GPU mining group of assets.

Despite the poor results, the company's CEO, Jaime Leverton, is optimistic about the future and thanks the team for their commitment to building a diversified business to deliver future revenue growth.

"As we look ahead, we will continue to uphold these operating principles as we work to close our business combination with USBTC and begin operating as a US-domiciled, digital asset mining, hosting, managed infrastructure operations, and high performance computing organization," Leverton added.

Troubled Bitcoin Miners Feel the Crypto Winter

Although the first gusts of warmer March winds and the coming spring can be felt outside the windows, winter in the crypto market does not seem to be melting. Before Hut 8, several other BTC miners and mining-related companies had already published their results for the fourth quarter and full year of 2022, which also showed abysmal results.

Canaan Inc. (NASDAQ:CAN), a cryptocurrency mining hardware manufacturer, reported the fourth quarter revenues at $56.8 million, translating to 59.9% quarterly and 82.1% yearly decreases. As a result, Canaan reported a significant decrease in the gross profit for the entire year of 2022, to $253.4 million from $411.2 million reported in 2021.

HIVE Blockchain Technologies Ltd. (TSX:HIVE), another publicly-listed crypto mining company, lost $90 million in the fourth quarter compared to the $37 million loss reported in the third quarter of the calendar year 2022.

Northern Data (XETR:NB2), a publicly-listed provider of High-Performance Computing (HPC) solutions from Germany, published its own BTC production report showing a 315% boost in crypto production during 2022. The company was able to mine 2,798 tokens and forecasted an annual revenue in the range of EUR 190-194 million. Although the increase is significant, it is still lower than the result for 2021 in revenue expressed in traditional currency.

According to Glassnode data, mining revenues reached a record-breaking $15.3 billion in 2021 and were significantly reduced in 2022 by $6 billion.