American Bitcoin reported quarterly net income of $126 million, with the result largely driven by a $197.3 million noncash gain from its Bitcoin (BTC) holdings. Despite the headline profit, the company continues to face mounting mining costs and declining revenues as competition among miners intensifies and major industry players increasingly shift toward artificial intelligence businesses.
Declining mining revenue and rising costs
The Eric Trump-backed firm saw its mining revenue drop 5.5% from the previous quarter, reaching $63.4 million, while the cost to mine a single BTC surged 15% to $42,100. Excluding gains from its BTC holdings, American Bitcoin would have posted an operating loss of approximately $5.5 million. The company also recorded a $64.3 million loss on derivatives.
American Bitcoin reported earnings per share of $1.73, significantly higher than analysts’ expectations of $0.26 compiled by Yahoo Finance. However, its operating performance remained under pressure, with a gross mining profit falling to $25.8 million from $33 million in the previous quarter. The mining margin declined from 49% to 41% as the impact of elevated electricity costs became more pronounced.
“Despite seasonal power cost pressures, we continued mining Bitcoin at a structural discount to spot,” CEO Mike Ho stated during the results announcement.
“Despite seasonal power cost pressures, we continued mining Bitcoin at a structural discount to spot,” CEO Mike Ho said in the company’s earnings release, highlighting that operating challenges persist even as the firm builds its BTC reserves.
American Bitcoin mined 891 BTC during the quarter, down from 932 BTC in the preceding three months. The company attributed rising mining costs primarily to higher electricity prices. Quarterly revenue missed analysts’ expectations, landing at $63.4 million versus a consensus forecast of $74.35 million—a gap of nearly 15%.
Compared to the same period last year, revenue was nearly flat, dropping slightly from $64.2 million to $63.4 million. Net profit, however, increased substantially from $3.5 million to $126 million due to the revaluation of Bitcoin holdings.
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Net income | $126 million | N/A | $3.5 million |
| BTC mined | 891 | 932 | N/A |
| Mining revenue | $63.4 million | $67.1 million | $64.2 million |
| Mining margin | 41% | 49% | N/A |
| Cost to mine 1 BTC | $42,100 | $36,609 | N/A |
Meanwhile, the price of Bitcoin fell 5% in 24 hours to $76,119 as of 8:50 p.m. UTC, according to CoinGecko. Shares of American Bitcoin (ABTC) closed 15% lower at $5.31 on Thursday, reflecting investor caution over the company’s operational outlook.
Industry pivots to AI as competition intensifies
American Bitcoin’s approach stands in contrast to competitors such as Riot Platforms, MARA Holdings, and Core Scientific, which have accelerated their investments into AI-focused infrastructure. Riot Platforms is building large-scale AI data centers, while MARA Holdings and Core Scientific have begun transforming significant parts of their operations toward AI services alongside Bitcoin mining.
American Bitcoin, by comparison, continued to grow its BTC reserves, holding 8,427 BTC at the end of September, up from 3,418 BTC a year earlier. This accumulation strategy aims to capitalize on future BTC price appreciation, but some analysts have raised concerns about its long-term viability, given rising mining difficulties and energy demands.
David Gamble, founder of Enigma Holdings, an asset manager specializing in Bitcoin mining and AI infrastructure, voiced skepticism about the sustainability of American Bitcoin’s business model. Gamble stated that profitability is increasingly tied to managing energy infrastructure and that mere accumulation of mined Bitcoin does not automatically create shareholder value.
Gamble observed that the competitive edge in Bitcoin mining is moving toward control over energy infrastructure, not just high hashrate or BTC accumulation. He noted that AI data centers can, in some regions, generate higher returns compared to mining Bitcoin.
Gamble explained that while transitioning to AI is an attractive proposition for some industry players, not every mining facility is suited for such a shift. He emphasized the need to account for asset depreciation, hardware refresh cycles, financing costs, and alternative uses of capital.
American Bitcoin’s recent report underscored the diverging strategies among top miners as the sector undergoes rapid transformation amid volatile cryptocurrency prices and evolving energy economics.
Mini dictionary: Enigma Holdings is an asset management company specializing in digital asset mining and AI infrastructure investment. It provides financial services and infrastructure solutions for cryptocurrency mining and artificial intelligence operations.
