Crypto miner BIT Mining, once heavily reliant on Ethereum for its self-mining revenue, has reportedly shifted its focus to Dogecoin and Litecoin after Ethereum moved away from proof of work to proof of stake last year. The Ohio-based miner, listed on the New York Stock Exchange, recently reported revenue of $72.9 million for the last quarter, which, despite being a near-20% increase from the previous period, is a staggering 75% drop year on year.
The firm has three primary revenue sources: mining crypto itself, mining as part of a pool, and hosting services in its data centers. Notably, its mining pool revenue made up 82% of total inflows at $60 million, while self-mining and data centers each contributed around $6 million. Prior to Ethereum’s Merge event in September, which transitioned the blockchain from energy-intensive proof-of-work to a proof-of-stake consensus mechanism, Ethereum mining accounted for more than three-quarters of BIT Mining’s self-mining revenue.
With the switch to proof of stake, BIT Mining’s self-mining revenue took a sharp dive, plummeting from $7.1 million in Q3 2022 to $1.9 million in the following period. The firm is now increasingly focused on mining Litecoin and Dogecoin, which experienced skyrocketing hashrates around the time of the Merge, despite their hashing algorithms differing from Ethereum’s.
Crypto enthusiast and analyst Mike Fay found BIT Mining’s decision to sell one-third of its Ethereum holdings between quarters to be perplexing. A total of 1,602 Ethereum—a value of $3 million at current prices—was sold, while the firm’s Dogecoin holdings grew 62% quarter on quarter, going from 42.8 million Dogecoin ($3.1 million) to 69.5 million Dogecoin ($5 million). Meanwhile, BIT Mining’s Bitcoin holdings remained unchanged at 289 BTC worth $7.8 million.
Fay questioned the company’s crypto treasury management decisions, stating that he does not see much of a future for assets like Dogecoin. He also expressed concerns over the firm’s decision to sell Ethereum when the company could generate rewards by staking it natively on-chain.
In any case, while BIT Mining boasts an $85% increase across 2023 so far and a $31 million market cap, it has continually underper