Cryptocurrency Industry Shows Strong Growth in Q2 2024: Bitfarms and AUM Surge

Bitfarms Reports Second Quarter 2024 Results

- Revenue of $42 million, down 16% Q/Q and up 17% Y/Y - - Gross mining margin of 51%, compared to 64% in Q1 2024 and 48% in Q2 2023 - - Current hashrate of 11.1 EH/s, up from 6.5 EH/s in Q1 2024 - - Current efficiency of 25 w/TH, a 26% improvement from Q1 2024 - - On track to achieve guidance of 21 EH/s and 21 w/TH in 2024 - - Increased MW capacity by 220 MW, bringing total to 648 and supporting over 35 EH/s in 2025 - - Special Committee concludes strategic alternatives review process - This news release constitutes a "designated news release" for the purposes of the Company's prospectus supplement dated March 8, 2024, to its short form base shelf prospectus dated November 10, 2023. TORONTO, Ontario and BROSSARD, Québec, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Bitfarms Ltd. (Nasdaq/TSX: BITF), a global vertically integrated Bitcoin data center company, reported its financial results for the second quarter ended June 30, 2024. All financial references are in U.S. dollars. During the quarter, Bitfarms made significant progress expanding its geographically diversified portfolio, adding 220 MW of capacity in Paraguay and Pennsylvania and energizing the Company's largest site to-date in Paso Pe, Paraguay. The Company's new 120 MW site in Sharon, PA, which is on the PJM Interconnection, once the agreement is finalized, provides long-term access to low-cost U.S. energy and flexible power trading options. The PJM grid enjoys an abundant energy supply that is rapidly adding renewable capacity and contributing to the reduction of greenhouse gas emissions in the U.S. Importantly, the site is well-suited for a wide range of opportunities beyond Bitcoin mining, including HPC/AI. In South America, Bitfarms energized its 70 MW site in Paso Pe, making it the Company's largest site by both EH and MW. The Company also signed an agreement for an additional 100 MW in Yguazu, bringing its total contracted power in Paraguay to 280 MW in the first half of 2025 and making Bitfarms the largest miner in the region. South America remains a highly strategic geography for Bitfarms, with favorable power contracts and access to reliable, sustainable energy. Bitfarms recently appointed Ben Gagnon, a seasoned leader with significant experience in Bitcoin mining, as Chief Executive Officer. Mr. Gagnon has been with the Company for five years and previously served as Chief Mining Officer, where he was integral in establishing the Company's fleet upgrade and transformative 2024 growth plan. "I am honored to step into the CEO role at such a pivotal time for the Company," stated Mr. Gagnon. "During the quarter, we made significant strides to position Bitfarms for accelerated growth and efficiency gains in the second half of the year and into 2025. We also continued to expand and diversify the business through new site agreements. Our new site in Sharon, PA represents Bitfarms' first foray into the PJM region, which we believe is the most attractive energy market in the U.S., and one in which we hope to further grow our footprint. This site, in combination with our new megawatts in South America, positions Bitfarms to reach over 35 EH/s in 2025, representing 67% growth from our year-end target of 21 EH/s. Over the next few years, we will continue executing our growth strategy with a sharp focus on U.S. expansion and diversification beyond Bitcoin mining." Jeff Lucas, Bitfarms Chief Financial Officer, stated, "Our robust balance sheet and capital efficient growth strategy provides us with exceptional financial flexibility. Our 2024 growth and efficiency improvement plans are fully funded with sufficient liquidity for the infrastructure buildout and miner procurements needed to enable us to achieve 21 EH/s and 21w/TH by year-end." Strategic Alternatives Review Process The Company also announced that the Special Committee of the Bitfarms Board of Directors, comprised of solely independent directors, has concluded the strategic alternatives review process announced on May 29, 2024. Following the completion of that process, the Special Committee unanimously determined that continuing to execute Bitfarms' strategic plan as an independent public company is in the best interest of the Company and its shareholders at this time. The Board and management team remain open to reviewing any and all opportunities that may deliver value to shareholders. Liquidity** As of June 30, 2024, the Company had total liquidity** of $195 million, comprised of $139 million in cash and 905 BTC valued at $57 million based on a BTC price of $62,700 at June 30, 2024. As of July 31, 2024, the Company held 1,016 BTC. Quarterly Average Revenue**** and Cost of Production per BTC* * Gross mining profit, gross mining margin, EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Direct Cost per BTC and Total Cash Cost per BTC are non-IFRS financial measures or ratios and should be read in conjunction with, and should not be viewed as alternatives to or replacements of measures of operating results and liquidity presented in accordance with IFRS. Readers are referred to the reconciliations of non-IFRS measures included in the Company's MD&A and at the end of this press release. ** Liquidity represents cash and balance of digital assets. *** Average watts represent the energy consumption of miners. **** Average revenue per BTC is for mining operations only and excludes Volta revenue. Conference Call Management will host a conference call today at 8:00 am EST. A presentation of the Q2 2024 results will be accessible before the call on the Investor website and can be accessed here. Participants may join by calling: 1-888-506-0062 (domestic), or 1-973-528-0011 (international), and should do so 10 minutes prior to the start time. Participants will be greeted by an operator and asked for the access code, which is 968924. If you do not have the code, then you may reference the Bitfarms' Q2 2024 results conference call. The conference call will also be available through a live webcast found here. A webcast replay will be available and can be accessed in the Events section of our Investor website. An audio replay will be available through August 20, 2024 and can be accessed at 1-877-481-4010 (domestic), or 1-919-882-2331 (international), using access code 50787. Upcoming Conferences & Events Non-IFRS Measures* As a Canadian company, Bitfarms follows International Financial Reporting Standards (IFRS) which are issued by the International Accounting Standard Board (IASB). Under IFRS rules, the Company does not reflect the revaluation gains on the mark-to-market of its Bitcoin holdings in its income statement. It also does not include the revaluation losses on the mark-to-market of its Bitcoin holdings in Adjusted EBITDA, which is a measure of the cash profitability of its operations and does not reflect the change in value of its assets and liabilities. The Company uses Adjusted EBITDA to measure its operating activities' financial performance and cash generating capability. 2023 Restatement During the preparation of the Company's financial statements for the year ended December 31, 2023, the Company reassessed the application of IFRS Accounting Standards on the accounting for warrants issued in connection with private placement financings conducted in 2021 and, as such, restated (the "Restatement") its consolidated statements of financial position as of December 31, 2022 and January 1, 2022, its consolidated statements of profit or loss and comprehensive profit or loss for the year ended December 31, 2022 and the three months ended March 31, 2023 and its consolidated statements of cash flows for the year ended December 31, 2022 and the six months ended June 30, 2023, which were previously filed on SEDAR+ and EDGAR. For further details, consult Note 3e of the audited consolidated financial statements for the year ended December 31, 2023, and Note 3d of the interim condensed consolidated financial statements for the three and six months ended June 30, 2024, available on SEDAR+ and EDGAR. As described in the interim MD&A for three and six months ended June 30, 2024, available on SEDAR+ and EDGAR, the Company is undertaking remediation efforts in light of the Restatement and in order to improve the overall effectiveness of its internal control over financial reporting for the accounting of complex financial instruments. About Bitfarms Ltd. Founded in 2017, Bitfarms is a global Bitcoin data center company that contributes its computational power to one or more mining pools from which it receives payment in Bitcoin. Bitfarms develops, owns, and operates vertically integrated mining farms with in-house management and company-owned electrical engineering, installation service, and multiple onsite technical repair centers. The Company's proprietary data analytics system delivers best-in-class operational performance and uptime. Bitfarms currently has 12 operating Bitcoin data centers and two under development situated in four countries: Canada, the United States, Paraguay, and Argentina. Powered predominantly by environmentally friendly hydro-electric and long-term power contracts, Bitfarms is committed to using sustainable and often underutilized energy infrastructure. To learn more about Bitfarms' events, developments, and online communities: Cautionary Statement Trading in the securities of the Company should be considered highly speculative. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the Toronto Stock Exchange, Nasdaq, or any other securities exchange or regulatory authority accepts responsibility for the adequacy or accuracy of this release. Forward-Looking Statements This news release contains certain "forward-looking information" and "forward-looking statements" (collectively, "forward-looking information") that are based on expectations, estimates and projections as at the date of this news release and are covered by safe harbors under Canadian and United States securities laws. The statements and information in this release regarding projected growth, target hashrate, opportunities relating to the Company's geographical diversification and expansion, upgrading and deployment of miners as well as the timing therefor, improved financial performance and balance sheet liquidity, other growth opportunities and prospects, and other statements regarding future growth, plans and objectives of the Company and the outcome of the strategic alternatives recommendations of the Special Committee of the independent directors of the Company, are forward-looking information. Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "prospects", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information.

Worldwide Digital Asset Based Exchange Traded Products AUM Grew 75% YTD, 2.5X Above Underlying Value

London, United Kingdom--(Newsfile Corp. - August 8, 2024) - Fineqia International Inc. (CSE: FNQ) (OTC: FNQQF) (FSE: FNQA) (the "Company" or "Fineqia"), a leading digital asset and fintech investment business, announces that its analysis of global Exchange Traded Products (ETPs) with digital assets as underlying collateral revealed Assets Under Management (AUM) year-to-date (YTD) increased to $87 billion, marking a 75% increase from $49.5 billion. The growth in ETPs' AUM outpaced the rise in the value of underlying digital assets year-to-date more than 2.5 times. ETPs' AUM increased by 75%, compared to a 29% rise in the overall digital assets market cap. This premium growth continued into July, following strong performances in Q1 and Q2. In July, the AUM of ETPs holding digital assets as their underlying decreased by 0.9%, down from $87.9 billion at the end of June. During the same period, the total digital assets market cap fell by 6%, dropping to $2.29 trillion from $2.43 trillion at the end of June. The substantial premium is still attributed to the net inflows observed for BTC Spot ETFs in July, bringing the total net inflow since inception to approximately $17.5 billion. In July, BTC's price saw an increase of 0.4%, rising to $62,075 from $61,850 at the end of June. Concurrently, the AUM of ETPs with BTC as the underlying asset grew by 2%, reaching $68.9 billion from $67.5 billion at the end of June. This data suggests net inflows into BTC ETPs for July, driven primarily by strong inflows into BTC Spot ETFs in the United States. "In the recent turbulent skies of the market, BTC ETPs are soaring like eagles," said Fineqia's CEO Bundeep Singh Rangar. "Their strength and resilience continue to lift them above the fray, pulling in investors along the way." In July, Ethereum (ETH) saw its value decrease by 12%, dropping to $3,000 from $3,409 at the end of June. During the same period, the AUM of ETPs holding ETH as the underlying asset declined by 14.8%, falling to $12 billion from $14 billion. ETH Spot ETFs began trading on July 23rd and recorded about $500 million in net outflows by the end of the month. This trend mirrors the pattern seen with the launch of BTC Spot ETFs, where inflows into the newly launched ETFs were partially offset by outflows from the Grayscale Bitcoin Trust (GBTC), which was converted into an ETF. In the first three weeks of trading, BTC Spot ETFs saw a cumulative net inflow of approximately $350 million. Once outflows from GBTC stabilised, the net inflow began to rise significantly. Similarly, Grayscale Ethereum Trust (ETHE) experienced strong outflows which surpassed the cumulative inflow observed for the newly launched ETFs. By the end of July, the newly launched ETH ETFs had seen about $1.5 billion in net inflows, while ETHE experienced approximately $2 billion in outflows. Less favourable market conditions compared to the BTC Spot ETFs launch may have reduced the pace of net inflows during the initial trading days while also accelerating outflows. In July, Grayscale Ethereum Trust's AUM decreased by approximately 40%, dropping from $10.2 billion at the end of June to $6 billion. This indicates that the net outflows from ETPs holding ETH as the underlying asset are due to the outflows from ETHE. If the trend seen with BTC Spot ETFs repeats, net inflows are expected to increase and attract new capital into the market once ETHE outflows begin to decline. "As Ethereum ETFs take the stage, they're laying down tracks for others to follow," said Fineqia's CEO Bundeep Singh Rangar. "Their launch paves the way for other digital assets to be adopted by the ETF industry." ETPs representing an index of alternative coins rose 2.2% in AUM during July, to $3.3 billion, from $3.23 billion recorded at the end of June. ETPs representing a diversified basket of cryptocurrencies decreased by 4.9% in July, to $2.94 billion from $3.09 billion recorded at the end of June. The total number of ETPs increased by 48 to 210, or 28% more, than those of Jan.1 this year. In July alone, the number of ETPs rose by 16, largely driven by the launch of ETH Spot ETFs, which contributed 8 new ETPs to the total. ETPs include Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs). Fineqia Research's AUM calculation factors in the launch or closure of ETPs during any stated period. The number of tracked ETPs stood at 210 as of the end of July, an increase of xx compared with the same period in 2023. All references to price are quoted in USD, and the cryptocurrency prices are sourced from CoinMarketCap and CoinGecko. The ETP and ETF AUM data referenced in this announcement were compiled from reputable sources, including 21Shares AG, Grayscale Investment LLC, VanEck Associates Corp., Morningstar, Inc., and TrackInSight SAS, by Fineqia's dedicated in-house research department. About Fineqia International Inc. Fineqia (www.fineqia.com) is a digital asset business that builds and targets investments in early and growth stage technology companies that will be part of the next generation of the Internet. Publicly listed in Canada (CSE: FNQ) with quoted symbols on the Nasdaq and the Frankfurt Stock Exchange, Fineqia's portfolio of investments includes businesses at the forefront of tokenization, blockchain technology, NFTs, AI, and fintech. Fineqia's VC fund in formation, Glass Ventures, backs category-defining Web 3.0 and Web 4.0 companies built by world-class entrepreneurs. https://twitter.com/FineqiaPlatform and https://www.linkedin.com/company/fineqia/. FORWARD-LOOKING STATEMENTS Some statements in this release may contain forward-looking information (as defined under applicable Canadian securities laws) ("forward-looking statements"). All statements, other than of historical fact, that address activities, events or developments that Fineqia (the "Company") believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding potential acquisitions and financings) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words "may", "will", "should", "continue", "expect", "anticipate", "estimate", "believe", "intend", "plan" or "project" or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company's ability to control or predict, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, the failure to obtain sufficient financing, and other risks disclosed in the Company's public disclosure record on file with the relevant securities regulatory authorities. Any forward-looking statement speaks only as of the date on which it is made except as may be required by applicable securities laws. The Company disclaims any intent or obligation to update any forward-looking statement except to the extent required by applicable securities laws. Crypto assets are generally unregulated, subject to sudden and significant changes in value and carry a high risk of total loss of the investment. As these are unregulated assets, investors are unlikely to have recourse to any regulatory protections or access to investor compensation schemes. If you are unsure as to the appropriateness of these assets for your circumstances, you should take independent financial and legal advice. Fineqia Inc. is not a crypto asset exchange and is not registered with any Authority as such. This material is general economic commentary and does not constitute a recommendation to buy, sell or otherwise transact in any of the assets discussed. To view the source version of this press release, please visit https://www.newsfilecorp.com/release/219246