‘Pretty compelling’: Aussie Bitcoin miner unfazed over plummeting crypto markets
The head of Australian-founded sustainable Bitcoin miner Iris Energy is unfazed by the cratering price of Bitcoin and other cryptocurrencies, saying the asset would have to fall significantly before it became unprofitable to mine.
Dan Roberts, the Sydney-based chief executive of Nasdaq-listed Iris, told The Age and The Sydney Morning Herald while he would rather the price of Bitcoin be higher, the current downfall – which has seen the cryptocurrency’s price fall nearly 20 per cent to $41,000 in the last five days – didn’t bother him.
Daniel Roberts says he’s not worried about the rapidly falling Bitcoin price.Credit:Janie Barrett
“I’d rather Bitcoin was higher, but it’s really not interrupting anything day-to-day,” he said. “We do get caught up in the broader crypto narrative, notwithstanding that the underlying business is more of a real asset data centre business.
“The revenue line is exposed to [Bitcoin], but even at the current price the profits are pretty compelling.”
On Thursday, Iris reported adjusted earnings of $9.8 million for the third quarter of the financial year – a 358 per cent increase on the prior year – though the company reported an underlying net loss of $3.6 million due to foreign exchange losses. Revenue was $20.2 million, up 445 per cent.
Currently, Iris – which uses renewable energy to power its massive Bitcoin mining warehouses – can turn a profit even if Bitcoin drops as low as $US8880 ($12,700), though Roberts noted at that point it would be unprofitable for many of the larger competing miners to operate.
This would increase Iris’ network share and, by effect, “substantially” lower the miner’s break-even point as the business would receive more share of the 900-odd Bitcoin that are mined daily.
The world’s best-known digital currency is currently around 12-month lows, as the crypto space has become further correlated with global tech markets, which have copped a battering in recent weeks due to rising interest rates and inflationary pressures.
Compounding this are concerns from crypto market participants over the viability of so-called stablecoins, which are touted as being pegged to the US dollar and are viewed as a safe store of value away from the typical crypto volatility.
This week, the third-largest stablecoin, TerraUSD, de-pegged from the dollar, causing a cascade of selling action that saw the asset fall as low as 30 US cents. Similarly, Tether, the largest stablecoin with a market capitalisation of around $137 billion, appeared shaky, with its value uncharacteristically dipping slightly to 99.3 cents.
Roberts said he believed a possible collapse of stablecoins would have no bearing on the long-term investment case for Bitcoin, saying that it could even mean sellers might rush into safer looking assets, such as Bitcoin.
“If you zoom out and you look at Bitcoin, nothing’s changed. There’s still only ever going to be 21 million of them, you still can’t stop it, no one can create more, no one can censor it. Given the current macro environment, I don’t think they are characteristics that are losing value,” he said.
Canaccord analyst Joseph Vafi told clients the company was continuing to execute solidly against its plan and “can deliver strong profitability even if Bitcoin price stays at current levels for the time being”. However, due to the broader market pullback, the analyst lowered his price target to $US14.
Shares in the business fell 10 per cent to $US6.89 in after market trade on Thursday.
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