American Bitcoin reports $126 million profit as mining revenue falls

Profit driven by Bitcoin holdings, not mining

American Bitcoin, the Eric Trump-backed Bitcoin miner, reported quarterly net income of $126 million on Wednesday. Bitcoin mining is the process of using computers to create new Bitcoin and secure the network.

The profit was mainly driven by a $197.3 million noncash gain on its Bitcoin holdings. Mining revenue fell 5.5% to $63.4 million from the previous quarter, and the cost to mine one Bitcoin rose about 15% to $42,100.

Excluding gains from its Bitcoin holdings, the company would have reported an operating loss of about $5.5 million, according to its financial statements. It also recorded a separate $64.3 million loss on derivatives. CEO Mike Ho said, despite seasonal power cost pressures, the company continued mining Bitcoin at a structural discount to spot.

Key numbers from the quarter

• Net income: $126 million, compared with $3.5 million a year earlier.
• Earnings per share: $1.73, compared with an analysts' consensus estimate of $0.26, according to Yahoo Finance data.
• Revenue: $63.4 million, compared with analysts' estimates of $74.35 million, according to Yahoo Finance data.
• Gross mining profit: $25.8 million, down from $33 million in the previous quarter.
• Mining margin: 41%, down from 49%.
• Bitcoin mined: 891 BTC, down from 932 BTC in the previous quarter.
• Bitcoin held at the end of September: 8,427 BTC, up from 3,418 BTC a year earlier.

Higher electricity prices were the main reason mining costs increased, the company said. Compared with the same period last year, revenue was nearly unchanged, falling from $64.2 million to $63.4 million.

Bitcoin was trading at $76,119, down 5% over 24 hours as of 8:50 p.m. UTC, according to CoinGecko data. American Bitcoin shares closed Thursday down about 15% at $5.31.

What an industry expert says about the mining business

David Gamble, founder of Enigma Holdings, which focuses on Bitcoin mining and AI infrastructure, said the reported profit does not tell the full story of the mining business. He said mining Bitcoin below its market price does not automatically mean the company is creating shareholder value.

He also said the company's accumulation strategy may not be flawed, but it raises questions about long-term sustainability. He pointed to rising mining difficulty and the need to keep investing in newer and more efficient technology.

Gamble said the competitive advantage in the industry is shifting toward energy infrastructure. Bitcoin miners and AI companies compete for the same power supply, and AI data centers could make more money than Bitcoin mining in some areas. However, he said not every mining facility can simply move into AI, because depreciation, equipment replacement, financing costs and the opportunity cost of using capital elsewhere must also be considered.

How rivals are taking a different path

Competitors are expanding into artificial intelligence while American Bitcoin continues mining and holding Bitcoin. Riot Platforms is building large AI data centers, according to its latest earnings. MARA Holdings is expanding into AI while continuing to mine Bitcoin. Core Scientific has already shifted much of its business toward AI data centers.

What is confirmed and what remains a question

The reported profit, the gain on Bitcoin holdings, the fall in mining revenue and margin, and the rise in mining costs are based on the company's financial statements and earnings announcement. Long-term sustainability is not confirmed by the results. Gamble raised it as a question linked to mining difficulty, technology costs and competition for power.

Why the split between mining and AI matters

The results show a divide among Bitcoin miners. American Bitcoin is building its Bitcoin reserves, while rivals are investing in AI to find new sources of revenue. The shared competition for power supply makes energy access a central issue for both strategies, based on the expert comments in the source.

Sources

• Cointelegraph