DigitalBTC Reports Mounting Net Losses Due To Bitcoin Volatility

Bitcoin mining has been in a state of flux for nearly a year now, as there is hardly any money to be made.  Even cloud mining providers are struggling to make ends meet, with the low Bitcoin price not doing anyone any favours.  Australian-based Bitcoin mining company DigitalBTC reported severe losses before and after taxation.  Things are not looking that good for Bitcoin mining companies around the world right now.

DigitalBTC: Millions in Losses Between June 2014 and June 2015DigitalBTC

Being based in Australia is not helping DigitalBTC much either.  Australia is one of the few countries in the world where Bitcoin taxation is officially enforced by law and all companies have to adhere to those rules.  Bitcoin taxation only made the net losses for DigitalBTC worse, but the problems run far deeper than regulatory reasons.

It has to be said, however, that DigitalBTC’s mining revenue for the past year is quite impressive.  A total value of AU$6.4m has been generated by the company’s mining operations, which can be seen as a strong performance from the bread and butter of DigitalBTC’s mining operations.

“Despite the unfavourable depreciation of the bitcoin price, I am pleased with the growth the company has achieved from its bitcoin trading and mining activities, which continue to provide strong revenue generation,” DigitalBTC Executive Chairman Zhenya Tsvetnenko told DigitalMoneyTimes.

DigitalBTC’s impressive earnings were not enough to keep the company’s balances in the black unfortunately. At the end of the fiscal year, on June 30th 2015, the company reported a net loss of AU$3.16 million before taxation.  Once all taxes were deducted from the net loss, the total amount in the red climbed to AU$6.77 million.

But there is positive news to report as well, as DigitalBTC successfully completed a round of funding in May of 2015.  A total of AU$3.5m was raised for the development of AirPocket, an app-based cross-currency remittance platform based on the peer-to-peer principle.  According to a DigitalBTC spokesperson, AirPocket will be available to select Latin America countries by the end of 2015.

Bitcoin Volatility Plays Key Role in Losses

“Investors should of course remember that movement in the Bitcoin price has little bearing on the technology and the digital currency revolution, of which we are a leading participant.  Short-term fluctuations do not affect our continued progress and we are well funded to operate our business and work towards achieving our near-term goals around managing our mining capacity and launching our cutting-edge software products.” – Zhenya Tsvetnenko told the media a few months ago.

The Bitcoin price remains fairly low for the time being, as most mining operations need a price point of US$320 per BTC to break even.  While this number might be slightly different for each individual company, any price below US$275 is not financially viable for Bitcoin service providers.

So far, there are no visible indications regarding an increase in Bitcoin price for the foreseeable future.  The Bitcoin price has been moving sideways for several months now, with an occasional sudden drop, only to later revert back to the previous high point.  Investors are getting a bit nervous due to the latest debacle between Bitcoin Core and Bitcoin XT developers,  which has had a downward effect on the Bitcoin price as well.


Source: ZDNet

Images courtesy of DigitalBTC, Shutterstock