Bitcoin Price Drops, Mining Camps Cut Power Even More Money

Riot Blockchain shut down Bitcoin mining several times during the recent heat wave in Texas. According to Gizmodo, the company sells electricity and earns $9.5 million from this activity.

Riot Blockchain’s Bitcoin mining activity in Texas (USA) is suspended due to the record heat. Stopping mining helps protect the mining rig and reduces the temperature, and brings in millions of dollars in electricity purchase contracts.

Previously, Riot Blockchain signed contracts to buy electricity from local supply companies. This allows them to resell electricity at a better price when the company is not using it.

Riot Blockchain announced it earned credits from the sale of electricity, estimated at $9.5 million, thanks to multiple closures of its mining rigs. This number is even more than the amount the company earned when selling Bitcoin in June.

According to the company’s homepage, Riot Blockchain sold 275 BTC, with proceeds of just $5.6 million in June. In 2021, the company says it sold 444 Bitcoins, worth around $16 million, just before the BTC price spike in late 2021.

Meanwhile, the net profit of the electricity sale proves that many miners can still “live well” even when the crypto market is depressed, and mining operations are disrupted. Digiconomist’s Bitcoin Energy Consumption Chart shows kilowatt-hours per year peaking in early June but declining throughout June and July.

Now, that chart is starting to move again, and even in a bearish state, the energy consumption for Bitcoin mining is higher than in March 2021.

Several times in July, the Electricity Stability Council of Texas (ERCOT) has asked businesses to cut back on their electricity use. Although Riot and its massive Bitcoin mining facility in Rockdale (Texas) have cut electricity usage, it is still one of the most energy-intensive businesses locally.

Currently, ERCOT offers one-year power purchase agreements (PPAs). However, Mr. Lee Bratcher, President of the Texas Blockchain Council said that only a few large Bitcoin mining camps need these PPAs. Additionally, Mr. Bratcher called the PPAs “a good deal” for ERCOT, as the Council can get back the energy it needs, helping to offload the grid during peak times.

The amount of Bitcoin mined in July was 318, 28% less than in the same month of 2021. Although the companies have publicly accepted the shutdown to preserve the grid, they also rejected the idea that suppliers increase electricity prices during peak periods.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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