Texas cryptomining outfit earns more from idling rigs than digging Bitcoin

Bitcoin mining outfit Riot Platforms earned $31.7 cardinal from Texas powerfulness authorities past period for curtailing operations – acold much than nan worth of nan Bitcoin it mined successful nan aforesaid period. 

In a property merchandise yesterday, Riot said it produced 333 Bitcoin astatine its mining operations successful Rockdale, Texas, which would person been worthy conscionable awkward of $9 cardinal connected August 31. All nan rate earned from those power credits, connected nan different hand, equates to astir 1,136 Bitcoin, Riot CEO Jason Les said successful nan company's monthly update.

"August was a landmark period for Riot successful showcasing nan benefits of our unsocial powerfulness strategy," Les said. "Riot achieved a caller monthly grounds for Power and Demand Response Credits … which surpassed nan full magnitude of each Credits received successful 2022.

"These credits importantly little Riot's costs to excavation Bitcoin and are a cardinal constituent successful making Riot 1 of nan lowest costs producers of Bitcoin successful nan industry," Les said. 

The Electric Reliability Council of Texas (ERCOT) operates a request consequence program that allows large power consumers, for illustration Riot, to gain powerfulness credits for utilizing little of it for operations and trading powerfulness backmost to nan grid, arsenic good arsenic further in installments for being enrolled successful its request consequence programs.

As we reported successful August of past year, nan institution earned $9.5 cardinal successful credits during a July 2022 heatwave arsenic good – still acold little than it earned successful Texas's hottest August connected record this year.

Energy prices person been mostly up, and aren't coming down, but you cognize what has deflated? The value of a Bitcoin. Sure, nan value of 1 BTC has been up from nan depths it plumbed precocious past year, but hovering successful nan mid-$20k scope each twelvemonth is thing for illustration nan heady late-2021 highs of adjacent $70k per coin.

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The operation of inflated energy costs and a driblet successful nan worth of Bitcoin intends mining simply isn't arsenic profitable arsenic it was successful 2021, nan twelvemonth Riot's gross soared arsenic request for, and nan worth of, Bitcoins rose. 

Fast guardant conscionable a twelvemonth and things began looking different. Losses followed arsenic Bitcoin prices plummeted and waste and acquisition measurement started to shrink – a problem that has only continued successful nan crypto world.

Analysts spot Bitcoin miners struggling, and JPMorgan Chase said precocious that nan marketplace headdress of nan largest Bitcoin mining firms successful nan US dropped by 21 percent successful August. Surprise, astonishment – Riot, pinch a 39 percent driblet successful marketplace headdress complete nan month, was nan worst hit. While Riot's banal is up this year, for illustration Bitcoin its worth has dropped precipitously since 2021, erstwhile nan mining patient peaked astatine $71.33 a share. Today it's worthy conscionable $11.10. 

But if ERCOT is going to salary nan marketplace mWh complaint for not mining, it can't beryllium that bad of a business model.

Neither ERCOT nor Riot responded to questions for this story. ®