• BIT Mining, a crypto-mining firm listed on the New York Stock Exchange, has changed its crypto treasury strategy from Ethereum mining to Dogecoin and Litecoin.
• Following Ethereum’s transition to proof of stake, BIT Mining’s self-mining income dropped significantly in Q4 2022.
• Analyst Mike Fay has raised doubts about BIT Mining’s decision to sell one-third of its Ethereum holdings and dramatically increase Dogecoin holdings.
BIT Mining Shifts Crypto Focus After Ethereum Transition
BIT Mining (BTCM), a leading cryptocurrency miner listed on the New York Stock Exchange, has switched from Ethereum mining to focusing largely on Dogecoin and Litecoin following Ethereum’s switch from proof of work to proof of stake. The company reported quarterly revenue of $72.9 million for the period ending March 2023, representing an increase of nearly 20% quarter over quarter but a 75% decrease year over year.
BIT Mining’s Revenue Split Across Three Sectors
82% ($60 million) of BIT Mining’s total revenue came from their mining pool in the previous quarter while self-mining and data centers each contributed around $6 million apiece. Before the transition last September, known as the Merge, Ethereum mining made up more than three-quarters (77%) of BIT Mining’s self-mining income. With the Merge eliminating miners‘ necessity, their self-mining revenue plunged from $7.1 million in Q3 2022 to just $1.9 million in Q4 2022.
Dogecoin And Litecoin Skyrocket During Merge
Once Bitcoin rigs shut down during this time frame, both Dogecoin and Litecoin experienced skyrocketing hash rates due to their differing hashing algorithms from Ethereum; consequently raising concerns about BIT Mining’s decision to sell one third (1,602 ETH) of its Ethereum holdings amounting to approximately $3 million at current prices while increasing its Dogecoin treasury by 62%.
Analyst Mike Fay Raises Concerns About Strategy Change
In light of these changes in strategies Analyst Mike Fay shared his doubts via Seeking Alpha about BIT Mining’s new path forward concerning both selling off part of their Etheruem reserves and increasing their Dogewcoiin treasury significantly as well as asking questions regarding which currency will eventually be more profitable for them moving forward following such drastic alterations in their portfolio.
The shift away from Etheruem mining towards other currencies was inevitable given how much it had been dominating BIT Minig’s income prior to the Merge; however only time will tell whether or not such drastic changes will prove beneficial or detrimental moving forward for this already established crypto miner with roots firmly planted within the industry since 2013.