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Riot Platforms (NASDAQ:RIOT), which has been losing money due to less-profitable mining and soaring energy prices, is now relying on credits earned by curtailing its power consumption during peak demand in Texas.
The second largest bitcoin (BTC-USD) miner in terms of market capitalization earned $31.7M in credits from Texas power grid operator ERCOT in August, surpassing the total credits received in 2022. In Q2, it’d earned $13.5M in power credits.
During the record-breaking heatwave in August, Riot (RIOT) voluntarily curtailed its power use by over 95% and sold power back to the Texas grid through its fixed low-price contracts.
The credits, which significantly lower Riot’s (RIOT) cost to mine, equated to ~1,136 BTC. That’s much higher than its bitcoin (BTC-USD) production in August, when it mined 333 BTC, an 18.8% drop from July’s tally.
It is becoming increasingly less profitable to mine bitcoin (BTC-USD), given lower BTC prices and higher network hash rate deteriorating margins.
“Riot’s power strategy is a key competitive advantage, and when placed alongside our strong financial position and efficient miner fleet, put Riot in a leading position heading into the upcoming bitcoin ‘halving’ event next year,” said CEO Jason Les.
Most BTC miners have been operating at lower uptimes due to the summer heat, although Jefferies’ Jonathan Petersen expects this will moderate soon.
Riot (RIOT) more than tripled in value YTD as bitcoin (BTC-USD) rebounded this year from 2022 lows, but the stock is still well below the $79.50 peak seen in 2021.
