Interpretation of Bit Mining's Quarterly Report: Reduced Holdings of 512 Bitcoins, Termination of Kazakhstan Data Center Construction
The financial report shows that Bit Mining's revenue for the fourth quarter of 2021 was approximately $495.8 million.Author: Xu Cihao, Blockchain Daily
On the evening of February 17, BIT Mining Limited announced its financial report for the fourth quarter of 2021. The data shows that the company's revenue for the quarter was approximately $495.8 million, with revenue from the acquired mining pool business amounting to about $472.9 million, accounting for over 95.38%.
It is noteworthy that after the domestic cleanup of Bitcoin trading and mining in May 2021, BIT Mining transferred its domestic mining operations overseas.
The financial report indicates that as of December 31, 2021, BIT Mining held $55.1 million in cryptocurrency assets, including 450 Bitcoins, 5,931 Ethereums, 51.8 million Dogecoins, and various other cryptocurrency assets.
Reduction of over 500 Bitcoins
The financial report shows that BIT Mining's operating revenue for the fourth quarter of 2021 was approximately $495.8 million, compared to about $393.1 million in the third quarter of 2021, representing a quarter-over-quarter increase of 26.13%; the operating revenue for the fourth quarter of 2020 was approximately $800,000, a significant year-over-year increase of $495 million. The operating revenue for the fourth quarter of 2021 primarily came from the mining pool business acquired in April 2021, amounting to approximately $472.9 million.
On September 24, 2021, the central bank, in conjunction with the Ministry of Public Security, the Supreme People's Procuratorate, the Supreme People's Court, and other ten ministries, issued a notice on "Further Preventing and Handling Risks of Virtual Currency Trading and Speculation." Shortly thereafter, on October 14, BIT Mining announced that its mining pool subsidiary BTC.com would exit the mainland China market, stop new user registrations in mainland China, and orderly deactivate existing user accounts in mainland China.
The financial report mentioned that the company is working with existing users in mainland China to explore solutions, such as relocating these users' mining machines to overseas markets, allowing them to use mining pool services in a compliant manner.
"We have completed the migration of all Bitcoin mining machines to the United States and Kazakhstan," BIT Mining stated to reporters from Blockchain Daily.
The financial report shows that as of now, BIT Mining's theoretical maximum total Bitcoin hash rate capacity is approximately 825.4 PH/s. Among this, the total hash rate in the United States is 532.7 PH/s, with 378.5 PH/s already deployed in data centers, while the rest has been fine-tuned and is awaiting deployment.
In Kazakhstan, BIT Mining has Bitcoin mining machines with a total hash rate of 292.7 PH/s, of which 135.3 PH/s has been deployed in data centers, and the rest has been fine-tuned and is awaiting deployment.
In the three months ending December 31, 2021, BIT Mining produced 102 Bitcoins from cryptocurrency mining operations and confirmed approximately $5.6 million in revenue. To date, BIT Mining has produced a total of 488 Bitcoins.
Regarding Ethereum mining machines, BIT Mining's theoretical maximum total hash rate capacity for Ethereum mining machines is approximately 4800.0 GH/s, of which 4737.6 GH/s has been deployed. In the three months ending December 31, 2021, BIT Mining produced 3,957 Ethereums through its Ethereum mining operations, confirming revenue of approximately $16.5 million.
Additionally, the financial report shows that as of December 31, 2021, BIT Mining held $55.1 million in cryptocurrency assets, including 450 Bitcoins, 5,931 Ethereums, 51.8 million Dogecoins, and various other cryptocurrency assets.
According to BIT Mining's previously released financial report for the third quarter of 2021, as of September 30, 2021, the company held approximately $56.8 million in cryptocurrency assets, including 860 Bitcoins, 2,024 Ethereums, and various other cryptocurrency assets.
It is clear that BIT Mining reduced its holdings by 512 Bitcoins in the fourth quarter of 2021.
"It is expected that Ethereum's potential will play a key role in driving decentralized and tokenized innovations in internet technology." Regarding the reduction of Bitcoin holdings, BIT Mining CEO Yang Xianfeng explained in the financial report.
In the previous third-quarter financial report, Yang Xianfeng had stated that he foresaw the potential value of Ethereum as a foundational currency, including its value in non-fungible tokens (NFTs), decentralized finance (DeFi), and the metaverse.
Termination of Kazakhstan Data Center Construction Plan
In terms of data center operations, on June 21, 2021, BIT Mining announced the cessation of operations for two big data centers in Sichuan based on a written notice from the State Grid Sichuan Ganzi Electric Power Co., Ltd.
In September 2021, BIT Mining signed a cooperation agreement with Viking Data Centers, LLC to acquire a 51% stake in a cryptocurrency mining facility under construction in Ohio, USA, with an operational capacity of 85 MW.
In October 2021, the company made additional investments, increasing the mining facility's capacity from the originally planned 85 MW to 150 MW, raising its ownership stake to 55%. BIT Mining expects to complete the construction of the mining facility in the first half of 2022. As of now, approximately 50 MW of the facility has been constructed, with about 43 MW operational.
The financial report indicates that the maximum capacity of the data center in Hong Kong is approximately 1.4 MW, which has been operational and mining ETH since October 2021.
Relevant personnel from BIT Mining stated to reporters from Blockchain Daily that the Hong Kong data center is relatively smaller compared to the U.S. mining facilities, and its positioning is to serve mining such as PoC and PoS.
It is noteworthy that on May 24, 2021, BIT Mining announced that it had signed a legally binding investment term with a Kazakhstan company, and both parties would jointly invest in the construction of a big data center ("Kazakhstan Mining Facility") in Kazakhstan. According to the terms, BIT Mining planned to invest a total of 60 million RMB (approximately $9.33 million) to jointly build and operate a mining facility with a load of 100 MW with its partner. Upon completion, the company would hold an 80% stake in the Kazakhstan mining facility, while the partner would hold a 20% stake.
"Due to the instability of local energy supply, the company has terminated the construction plan for the Kazakhstan data center announced in May 2021," BIT Mining stated in the financial report, noting that Bitcoin mining machines deployed in third-party data centers in Kazakhstan are still operational and unaffected.
It is noteworthy that the financial report shows that the computing power of mining machines deployed in the U.S. and Hong Kong has increased, resulting in a rise in mining business revenue of approximately $16.3 million. However, it did not mention the revenue situation of the Kazakhstan mining business.
BIT Mining Vice President Zheng Danni stated to reporters from Blockchain Daily that the current mining revenue includes that from Kazakhstan, but there has been no further increase in mining machines in Kazakhstan, and the focus of the mining operations remains primarily in the United States.
