Riot Blockchain Rebrands as It Diversifies Business Amid Miner Capitulations
Bitcoin miner Riot Blockchain has changed its name to Riot Platforms to reflect a more diversified business.
In a press release, the company announced that despite the name change, it would continue trading using the RIOT ticker symbol on the Nasdaq.
Riot Self-Mining Hashrate Could Hit 12.5 EH/s by Q1 2023
The rebranding announcement comes roughly a year-and-a-half after the company closed a deal to acquire a Rockdale, Texas Bitcoin hosting facility belonging to Whinstone US. Riot also agreed to acquire electrical equipment manufacturer ESS Metron seven months later.
“The scope and scale of our businesses continues to expand, and this rebranding better reflects our position as strategic allocators of capital to increasingly broaden the scope of our Bitcoin operations,” said CEO Jason Les.
Whinstone and Riot will operate under the Riot Platforms business entity, while ESS Metron will continue to operate using its existing name due to customers’ familiarity with the brand.
Riot’s Q3 2022 financial and operational updates revealed lower Bitcoin production in the quarter, owing to the company’s power-curtailment strategy and a lower BTC price. Bitcoin fell 60% in 2022 and is currently down 75% from its Nov. 2021 all-time high of around $69,000.
Riot hopes to achieve a self-mining hashrate capacity of 12.5 Exahashes/second should it successfully deploy 115,450 Antminer ASICs by Q1 2023 and receive no production boost from its 200MW immersion-cooling infrastructure.
Miners Return Equipment to Extinguish Debt
Several miners are filing for bankruptcy or returning ASICs because they can’t service debt accrued during previous Bitcoin bull markets. ASICs are purpose-built mining computers that miners use to solve a cryptographic puzzle needed to broadcast a block of transactions to the Bitcoin network and earn Bitcoin.
In the early stages of the crypto mining industry, borrowers often dictated the terms of loan agreements. As a result, most mining firms offered ASICs as collateral, making these machines the primary way lenders could recoup their investment if miners faced insolvency.
With Bitcoin buffeted on multiple fronts, including U.S. recession threats and a general unease regarding the crypto industry after the collapse of several major crypto entities, some miners facing falling BTC revenues have returned ASICs to their lenders. In some cases, returning machines cost less than paying off loans.
Sydney-based Iris Energy and Stronghold Digital Mining chose to return machines to erase their debt, while Greenidge Generation Holdings signed a non-binding term sheet to sell their devices to lender NYDIG. NYDIG will reduce Greenidge’s debt by assuming ownership of the machines that Greenidge will now host.
Argo Blockchain recently sold its entire Texas facility to mining financial services firm Galaxy Digital for $65 million to help stave off bankruptcy.
Texas miner Core Scientific could recoup $2 million monthly from the shutdown of about 37,000 ASICs belonging to bankrupt lender Celsius Network. Core Scientific filed for bankruptcy in Dec. 2022.
The Texas-based miner had previously asked a court to uphold an earlier hosting agreement between itself and Celsius which compelled the defunct lender to cover rising energy costs. The lender, which is itself undergoing Chapter 11 bankruptcy proceedings, has not made the required payments, prompting Core to shut down the machines.
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