Bitcoin miner Riot says chip shortages, climate-focused filings are risks to profits
Bitcoin (BTC) miner Riot Platforms said ongoing chip shortages, persistent demand for hash rates and a deepening climate change agenda in the United States could impact its balance sheet, according to its latest annual report.
Riot, one of the many Bitcoin mining companies gearing up for the upcoming halving event, highlighted more than 13 key concerns in its February 23 annual 10-K filing.
One of the risk factors cited by Riot is the ongoing global chip crisis, as very few manufacturers can reliably make “high-spec” ASIC chips.
“The ongoing global supply chain crisis, coupled with increased demand for computer chips, has created a shortage of semiconductors,” Riot said, which could have long-term effects on mining.
In December, Riot agreed to buy 66,560 miners from developer Microbit for $291 million. According to the company's CEO, Jason Les, it is the largest hash rate sequence in the company's history.
In its recent annual report, Riot said it will continue to pay “higher than usual” costs to acquire and install its mining machines until the chip shortage is resolved.
However, even if they were able to find ASIC miners, they could still face “design flaws,” Riot said.
The company said it had previously encountered software and firmware complications when trying to adapt its miners to work in “immersion-freezing” environments.
Meanwhile, Riot faces a threat from an increasingly “competitive industry,” meaning the company will need to continue to grow its hashrate as global hashrates rise to maintain its market share.
“We believe that in order to compete in this highly competitive industry, we must continue to find new miners to replace those lost through wear and tear and other damage, and increase hash rate to keep up with the growing global network. Hash rate.”
Meanwhile, Riot notes that bitcoin faces “significant scaling hurdles” that could hinder its potential to become a widely accepted payment method.
“Demand for Bitcoin may slow or decline,” Riot said, which in turn could negatively impact the price of Bitcoin, weakening Riot's balance sheet.
$ RIOT real cost of mining: $ 23,268
I didn't do a full $RIOT article tonight, but wanted to share what I see as their true mining costs based on their full 10-K results for 2023.
The only major thing I'm sharing right now from my edits below is… pic.twitter.com/gSWYO6AIUr
— Ben Werkman (@BenWerkman) February 24, 2024
The growing climate change agenda in the Texas and United States governments could pose challenges for the company, he said.
New legislation and increased regulation on climate change could impose significant costs on us and our suppliers, including costs associated with increased energy needs, capital equipment, environmental monitoring and reporting and other costs to comply with regulations.”
He said Riot could lose its competitive advantage if it follows stricter regulations than its peers in other regions.
RELATED: Bitcoin Mining Problem Has Halved, Exceeds 80 Trillion
Riot and the Texas Blockchain Council (TBC) recently received a favorable ruling from a US district judge in their lawsuit against several US energy officials seeking to collect invasive data from cryptocurrency miners.
Meanwhile, Riot has increased its Bitcoin production by 19% in 2023, mining a total of 6,626 BTC worth $341.4 million at current prices.
In the year The company's Bitcoin mining price has dropped by 33% to $7,539 in 2023.
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