Bitmine posts $6.3 billion annual net loss as Ether prices fall
In brief
- Bitmine reported a $6.3 billion net loss for the fiscal year ended Aug. 31.
- A $6.2 billion unrealized loss on digital assets drove most of the loss, per the 10-K.
- Revenue of $124.8 million topped the $119.8 million analyst average listed by Yahoo Finance.
- Staking and validation made up $121.4 million, or 97%, of revenue.
- Holdings stood at 6.07 million ETH, or 4.97% of supply, per a Monday update.
Mostly a paper loss
Almost all of the hit is unrealized. Bitmine's 10-K, as reported by Cointelegraph, shows $15.4 billion in total assets and $33.7 million in liabilities at fiscal year-end. Ether is the bulk of it (5.9 million ETH worth $14.6 billion). The rest of the balance sheet includes $545 million in cash and cash equivalents, 211 Bitcoin valued at $16.6 million, $186 million in Beast Industries shares and $77 million in Eightco Holdings shares.
Staking carries the revenue line
Revenue totaled $124.8 million, above the $119.8 million average analyst estimate listed by Yahoo Finance. Staking and validation accounted for $121.4 million of that, or 97%.
Put simply, Bitmine's top line is a staking line.
The stock didn't get to react to the filing on Tuesday. Bitmine shares closed 2.8% lower at $18.08 that day, bringing their year-to-date decline to 33%, according to Yahoo Finance, and the company filed the 10-K after the market closed.
Still adding ETH
The treasury hasn't stopped growing. In a Monday update (separate from the 10-K), Bitmine said its holdings rose to 6.07 million ETH as of Sunday, or 4.97% of Ether's supply. It estimated $309 million in annualized rewards on the 5.23 million ETH it had staked, a figure that's well above the staking revenue it booked for the full fiscal year.
That puts the company close to a level its chairman has talked about publicly. Cointelegraph described Tom Lee's remarks during a keynote at Token2049 in Singapore on Oct. 7 this way:
"Bitmine Chairman Tom Lee called 5% of Ether’s supply a “hard cap” for the company’s holdings"
How much room is left under that number? By Bitmine's own Monday figures, it's about 0.03 percentage points of supply. Lee's comment came from a conference stage, though, so it's his framing rather than a figure drawn from the annual report.
Frequently asked questions
Why did Bitmine post a $6.3 billion loss?
Bitmine said the net loss for the fiscal year ended Aug. 31 was driven largely by falling Ether prices. Its Form 10-K showed a $6.2 billion unrealized loss on digital assets, which accounts for most of the $6.3 billion total.
Where does Bitmine's revenue come from?
Staking and validation accounted for $121.4 million, or 97%, of Bitmine's $124.8 million in fiscal-year revenue. That total came in above the $119.8 million average analyst estimate listed by Yahoo Finance.
