Bitfarms Stock Plummets 18% After Mining Operations Wind Down

Bitfarms stock has plummeted by 18% following the company's announcement to wind down its Bitcoin mining operations over the next two years. The decision marks a significant pivot as Bitfarms plans to convert its 18-megawatt Bitcoin mining site in Washington State into artificial intelligence and high-compute data centers, with completion expected by December 2026.

CEO Ben Gagnon stated that despite this site representing less than 1% of their total developable portfolio, the conversion to GPU-as-a-Service could potentially generate more net operating income than the company has ever seen from Bitcoin mining.

Gagnon also highlighted the trend among cryptocurrency miners moving towards AI, indicating that many are likely to transition to lower-cost jurisdictions as mining difficulty and costs increase. He pointed out that public miners account for nearly a third of the Bitcoin network and are keen on pursuing higher economics associated with high-performance computing and AI.

Gagnon emphasized that the U.S. is an optimal market for investing in HPC and AI, in contrast to Bitcoin mining, which can operate in various locations. The company reported a net loss of $46 million in Q3, a significant increase from the $24 million loss reported a year ago, translating to a loss of 8 cents per share, which was below analyst expectations of a 2-cent per share loss.

Although Bitfarms' revenue surged by 156% year-over-year to $69 million, it still fell short of analyst estimates by over 16%. The report also indicated that Bitfarms mined 520 Bitcoins at an average cost of $48,200 each, and the company held 1,827 Bitcoins as of the reporting date.

Following these disappointing results, shares closed down nearly 18% at $2.60, and additional losses continued into after-hours trading, dropping another 3.5% to $2.51. These developments illustrate the broader struggles faced by cryptocurrency miners and their impact on stock performances as the industry evolves.