Crypto mining activity peaks as miners face harsh crypto winter and bitcoin price crash

As the crypto community was reeling from the FTX FTT/USD debacle throughout November, crypto mining companies relentlessly pursued every avenue available to shore up their revenues and maintain their margins.

In what is perhaps one of the harshest crypto winters ever seen, these digital asset mining companies are adopting innovative solutions to overcome the many challenges ahead on their way.

Take for example Riot Blockchain Inc RIOT which reached a record hash rate of 7.7 PE/s in November, despite producing below expectations due to deviations in the method of payment for the mining pool it uses.

While the company has decided to change its mining pool to one with a more stable reward mechanism, it plans to improve its current fleet of 72,428 miners and reach a 12.5 EH/s hash rate capability per Q4 FY2022-23.

Also read: Hut 8 halts Bitcoin mining due to energy dispute

Focus on infra and efficiency gains to mine more Bitcoin

The North American company Hut 8 Mining Corp HUT improved its hashrate capacity to 3.27 EH/s and reached an average production rate of around 7.9 Bitcoin BTC/ USD per day in November.

Having installed 2,000 new MicroBT Whatsminers at its Medicine Hat mining facility. Hut 8 has produced 238 bitcoins and holds a large reserve of 8,925 bitcoins as part of its long-standing HODL strategy.

The company is confident that its healthy balance sheet will allow it to retain its crypto holdings even in the current bearish phase, and has focused on improving its mining capacity to produce more output Bitcoin in the future.

In the case of TeraWulf Inc WULF, which has a fleet of 17,500 miners, it reduced its energy cost from $11,000 per bitcoin to $6,000, realizing a 45% drop from October 2022 and ~13% more bitcoin production as a result. With an average hash rate of 1.9 EH/s in November 2022, 20% higher than the previous month, the company reduced its electricity expenses by 60% compared to the average for the June-September quarter .

U.S. miner plans to add 15,000 more miners to its Nautilus Cryptomine facility in Pennsylvania by Q1 2023 and increase reliance on zero-carbon energy from current its current level of 91%.

Ethereum Merger Fuels Diversification, Switch to Bitcoin Mining

With the Ethereum ETH/USD network shifting to a Proof-of-Stake (PoS) consensus mechanism, miners who relied heavily on Ethereum mining had to act quickly and switch to other sources of income.

While some miners have switched to mining altcoins, the lower rewards on offer have made continued operations unsustainable for most.

However, mining companies such as HIVE Blockchain Technologies HIVE have made the transition to Bitcoin mining after being one of the leading Ethereum miners.

Relying solely on renewable energy for its mining operations, Hive admitted to facing higher operating expenses due to mining difficulties and reported a 44% drop in revenue for the first three quarters of 2022 versus the same period last year in its second quarter earnings release in mid-November.

The Canadian Bitcoin miner has sold all of its Ethereum holdings and is now fully committed to improving its hash rate capacity by 2.6 EH/s.

Subdued crypto prices and rising energy prices add pressure on margins

Despite all the advances and unique strategies employed in the