Market News

Bloomberg) -- Riot Platforms Inc., one of the largest Bitcoin miners in Texas, said it earned a record $31.7 million from power credits during the August heat wave that swept across the Lone Star State. 

The  Castle Rock, Colorado-based company has earned credits in part by participating in the demand response programs offered by the Electric Reliability Council of Texas, which is the state’s power grid operator. Those programs aim to ease power shortages by paying certain consumers for reducing or shifting their energy usage. Miners like Riot has been able to make millions from such shortages while residents in Texas see soaring electricity prices and power outages during extreme weathers such as heat waves and winter storms. 

The August amount surpassed the total of all credits received in 2022, Riot said in a statement Wednesday. During the second quarter, the company earned $13.5 million from power curtailment credits.

Bitcoin mining is an energy-intensive process in which miners use specialized computers to validate records of transactions on the blockchain and earn rewards in the form of the token.  

The windfall comes as Bitcoin miners weather through a prolonged decline in the value of digital assets, inflated energy prices, increasing competition among miners and the upcoming ‘halving’, which is a Bitcoin blockchain code update that drastically reduces mining revenue. The largest cryptocurrency at around $26,000 is worth less than half of the value during the bull cycle in late 2021.   

The power sold in August is worth approximately 1,136 Bitcoin, Riot said. The company produced 333 coins last month.

“August was a landmark month for Riot in showcasing the benefits of our unique power strategy,” Jason Les, chief executive officer of Riot, said in the statement. 

Shares of Riot have more than tripled this year to around $11.20. The stock tumbled 85% last year.    

(Adds context on the Texas agency that provides the credits in the second paragraph.)