BitMine’s annual filing of Nov. 10 implies a profit of about $2.8 billion for the three months ended Aug. 31, according to a calculation by the outlet CryptoSlate. The company has not reported that quarterly number itself: it comes from comparing the full-year accounts with the nine-month statements, and it is driven mainly by unrealized gains on digital assets.
The rebound does not erase the year’s losses. CryptoSlate, citing BitMine’s filings, says the company posted a full-year net loss of about $6.3 billion, compared with a loss of about $9.1 billion for the first nine months.
How the quarterly figure was derived
CryptoSlate obtained the June-August result by subtracting the cumulative nine-month amounts from the full-year totals. It describes the resulting net income of about $2.8 billion as measured before preferred distributions.
According to the same calculation, the main driver was an unrealized digital asset gain of about $2.8 billion in the quarter. The cumulative unrealized loss narrowed from about $9 billion through May to $6.2 billion for the full year.
Why paper gains can lift earnings
CryptoSlate describes BitMine’s accounting policy as measuring digital assets at fair value, with changes flowing through net income. Under that approach, a higher valuation can raise reported earnings without any cash being received.
This helps explain how a company can show a large quarterly profit while a full-year loss persists: reported earnings track the revaluation of holdings, not the cash generated by operations.
Operations still consumed cash
CryptoSlate, citing BitMine’s filings, reports that operating activities used $305.1 million of cash over the full year and $287.6 million over the first nine months. The difference implies about $17.5 million of operating cash used in June-August, despite the calculated profit.
Staking and validation remained the main source of revenue. CryptoSlate’s calculation implies $64.4 million from staking and validation out of $64.9 million of total revenue in the final quarter. Revenue and cash receipts are different measures, the outlet notes.
What remains unknown
It is not clear whether BitMine itself reports or comments on the quarterly figures, since they are derived by CryptoSlate. The sources do not give the amount of ETH held or the market price used for the valuation, nor the details of the preferred distributions and their effect on net income for common shareholders.
Sources
- cryptoslate.com CryptoSlate — BitMine posts $2.8B quarterly profit driven by Ethereum gains, but yearly net loss surpasses $6B Accessed
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