Bitfarms

Bitfarms’ debuting shares have been unable to escape the bearish crypto meta-trend, despite the firm claiming its profits have increased amid the recent drop in Bitcoin hash rate.

The highly anticipated Nasdaq debut of renewable energy-focused BTC mining firm, Bitfarms (BITF), saw the company’s stock fall by as much as 8.6% amid weakness in the broader crypto markets.

BITF opened at $4.04 and quickly climbed a couple of percent to tag a high of $4.11 before dropping as low as $3.90 as cryptocurrency prices tumbled. Bitfarm’s shares last traded hands for $3.96.

The share prices of publicly-listed Bitcoin mining firms have taken a beating over recent months.

Marathon Digital Holdings (MARA) is down roughly 51% from its early-April all-time high of $56.50 after its stock last changed hands for $27.83, while Hive Blockchain (HIVE) trading at $2.38 for a loss of 57% from its February high of $5.50, and Riot Blockchain (RIOT) priced at $31.57 after falling nearly 60% from its February peak of $77.90.

In addition to the heavy BTC sell-off that followed Bitcoin’s April all-time high, the poor performance of mining stocks has resulted from negative perceptions concerning the sector’s energy consumption, and reactions to China’s escalating crackdown on domestic miners.

However, Bitfarms claims to have benefited from the recent hash rate exodus from China amid the clampdown, with the Canada-based firm estimating 99% of its computation is powered by “green” hydroelectricity. In its June 10 production update, Bitfarms company stated:

"As the hashrate of Chinese miners falls, Bitfarms has earned higher transaction fees and increased its share of the total Bitcoin network hashrate. As a result, Bitfarms has been earning more Bitcoin for the same amount of computational power and operational cost."

Related: Nvidia GPU prices in China fall amid crypto mining crackdown

Despite the heavy drawdowns recently observed in the price of mining stocks, Cointelegraph reported in March that the sector had outperformed the spot price of Bitcoin by 455% during the preceding 12 months.

Bitfarms estimates it could have mined BTC for $4,125 each during Q4 2020 if its forthcoming Argentinian facility was operational.

Canadian Bitcoin mining firm Bitfarms has updated its plans for expansion in South America, revealing it has secured an eight-year contract to draw up to 210 megawatts, or MW, of electricity for $0.022 per kilowatt-hour, or kWh.

According to an April 19 announcement, Bitfarms has made significant progress in solidifying the terms for its Argentinian operation since first signing a non-binding memorandum to build a 60 MW power plant in October 2020.

In addition to expanding securing a 250% increase in power capacity and agreeing to a 10% increase in electricity pricing, Bitfarms revealed it is in advanced discussions with a local construction firm and engineering provider to begin building a mining facility in close proximity to its partner power plant, and is currently aiming to have begun mining Bitcoin at the facility in early 2022.

In early March, Bitfarms ordered 48,000 new-generation Bitcoin miners from MicroBT, with the recent announcement noting that “a substantial portion” of the inventory is earmarked for deployment at the new facility.

Bitfarms estimates it would have been able to mine Bitcoin for just $4,125 per BTC in Argentina during Q4 2020, comprising a roughly 45% saving over its Quebec facility — which can generate BTC for roughly $7,500 each.

The reduced production costs will also allow Bitfarms to extend the economic life of many older mining units, noting that a significant portion of its older mining hardware will be relocated to Argentina once the new facility is operational.

Bitfarms describes the facility as offering “geographic production diversification to reduce risk and serve as an effective hedge for Bitfarms against the next halving event in 2024.”

Earlier this month, Bitfarms revealed it will deploy 3,496 new miners between April and July of this year, increasing its operational hash rate to 280 pentahashes per second.

The firm also noted it is adding 7.5 Bitcoin to its reserves daily, currently holding 650 Bitcoin worth $41 million and predicting its inventory will hold 1000 BTC within the coming seven weeks.