Bitcoin Miners Cut Production by 25% Amid Power Curtailment and Weather

Bitcoin miner production experienced a significant decline in June, primarily due to power curtailment and adverse weather conditions. Major mining firms reported substantial decreases in their output, with Riot Platforms seeing a 12% drop and MARA Holdings experiencing a 25% reduction. These curtailments were strategically implemented to avoid high power costs and grid penalties during peak demand periods, particularly in regions like Texas.

Riot Platforms produced 450 Bitcoin (BTC) in June, a 12% decline from May, when the firm mined 514 BTC. The company's CEO, Jason Les, explained that the firm’s power strategy includes “economic curtailment” and voluntary participation in the Electric Reliability Council of Texas’s Four Coincident Peak (4CP) and other demand response programs. This strategy, according to Les, “significantly contributes to grid stability while enhancing Riot’s competitive positioning.” The 4CP program, which began in June, is designed to manage periods of highest electricity demand during the summer months.

Large electricity consumers, such as Bitcoin miners, face transmission charges based on their usage during peak periods, so they can voluntarily curtail operations to avoid these costs. Riot also reported that it sold 397 BTC for $41.7 million and currently holds 19,273 Bitcoin. Cipher Mining, another major player, produced 160 BTC in June and sold 58 BTC, holding 1,063 Bitcoin. The company stated that its June production numbers were impacted by deliberate curtailment as part of their “proactive 4CP avoidance strategy.” This approach allowed the company to avoid costly 4CP penalties and maintain its position as having some of the lowest power costs in the industry.

MARA Holdings reported a 25% reduction in production for June, with 211 Bitcoin mined compared to 282 the previous month. The company held a total of 49,940 BTC and did not sell any during the month. MARA CEO Fred Thiel attributed the decline to “reduced uptime from weather-related curtailment” and the temporary deployment of older machines in its Garden City, Texas, facility while storm-related damage was being repaired. “Natural variability in block luck — an expected dynamic when operating our own mining pool — also contributed,” he said.

CleanSpark, however, bucked the trend by increasing its Bitcoin production by 6.7% in June, surpassing its mid-year hashrate target of 20 exahashes per second (EH/s). The firm produced 445 Bitcoin and only sold 8, bringing its total holdings to 6,591 Bitcoin as of the end of the month. This increase highlights the varying strategies and outcomes among different mining firms during the same period.

The downturn in production was exacerbated by heatwaves and geopolitical tensions, which further impacted the network hashrate. The hashrate, a measure of the total computational power used to mine and process transactions on the Bitcoin network, saw a notable decrease. This reduction in hashrate directly affected miner output, with some firms reporting cuts of up to 25%. The decline was particularly pronounced at facilities like MARA's Garden City site, where older machines were deployed due to storm-related disruptions.

The curtailment of power was not only a response to weather conditions but also a strategic move to manage costs and avoid penalties. Insights from June's performance will likely inform further refinements to the curtailment model for the remainder of the summer. This approach aims to balance operational efficiency with cost management, ensuring that mining operations remain sustainable despite external challenges. The impact of these factors on Bitcoin mining underscores the industry's vulnerability to environmental and regulatory pressures. As mining firms continue to navigate these challenges, they will need to adapt their strategies to maintain profitability and operational stability. The curtailment of power and the deployment of older machines are temporary measures, but they reflect the broader need for resilience in the face of unpredictable conditions.