American Bitcoin, the bitcoin miner co-founded by Eric Trump, reported third-quarter net income of $126 million after posting a $57.2 million net loss in the previous quarter, but the reversal was driven primarily by a $197.3 million gain on digital assets rather than stronger mining output.
The company's results for the three months ended Sept. 30 show how changes in the value of corporate bitcoin holdings can dominate a miner's reported earnings. American Bitcoin recorded a $71.2 million loss on digital assets in the second quarter, making the swing in the value of its holdings the largest factor behind the quarter-over-quarter improvement.
Adjusted EBITDA reached $220.8 million, compared with a $45 million loss in the prior quarter, according to American Bitcoin's quarterly results. The figure reflects earnings before interest, taxes, depreciation and amortization, adjusted for certain items, and it rose sharply alongside the digital-asset gain.
Mining operations themselves moved in the opposite direction. Revenue from mining fell 5.4% from the second quarter to $63.4 million, down from $67 million. Bitcoin production declined 4.4% to about 891 BTC, from 932 BTC in the prior quarter.
Lower output and higher costs narrowed mining margins
American Bitcoin's cost of producing bitcoin increased 15.3% quarter over quarter, reaching roughly $42,100 per BTC from about $36,500. That rise came as the company produced fewer coins, reducing the amount of output available to absorb operating expenses.
Gross margin fell to 41% from 49%, while gross profit declined to $25.8 million from $33 million. The figures point to a more difficult operating environment even as the company's balance-sheet exposure to bitcoin generated a large accounting gain.
The distinction is particularly relevant for publicly traded miners, whose financial results often combine two separate businesses: producing bitcoin through mining and holding bitcoin on the balance sheet. A rising bitcoin price can boost the value of reserves and lift net income even if revenue, production volumes and mining margins weaken.
American Bitcoin said it sold a portion of the bitcoin generated during the quarter to fund operating costs. The company nevertheless added about 425 BTC to its reserve without making purchases, ending September with 8,427 BTC in total holdings.
That approach leaves the miner partly dependent on bitcoin's market value for reported earnings while requiring periodic sales to cover expenses such as electricity, hosting, labor and equipment. The reserve grew during the quarter, but the company's production figures show that adding to holdings became more expensive.
Network competition raised pressure on miners
The company's cost increase coincided with tougher conditions across the Bitcoin mining network. Global computing power surpassed one zettahash per second in late October, according to network estimates, reflecting an unprecedented level of competition among miners trying to win block rewards.
Bitcoin's mining difficulty also reached a record 148.36 trillion in the first week of November, based on Bitcoin blockchain data. Difficulty adjusts automatically to keep block production near the network's target pace. When it rises, miners need more computing work, and therefore more electricity, to produce the same amount of bitcoin.
For operators paying standard commercial electricity rates, the combination of higher difficulty and a large global hash rate places greater pressure on profit margins. Miners with lower-cost power, more efficient hardware or favorable hosting contracts have more room to withstand those conditions, while higher-cost operators may need to sell a larger share of mined bitcoin to meet expenses.
American Bitcoin's third-quarter numbers capture that squeeze: production fell, the cost per bitcoin rose and gross margin contracted even as the company's digital-asset holdings boosted bottom-line earnings.
Peers also benefited from digital-asset gains
Other publicly listed miners reported results shaped by the value of their bitcoin reserves. Hut 8 reported third-quarter net income of $189.5 million, including $413.8 million in primarily unrealized gains on digital assets, according to the company's earnings release.
Riot Platforms reported $181.4 million in quarterly revenue, with $116 million generated from bitcoin mining. The revenue breakdown illustrates a different emphasis: Riot's mining business remained a major contributor to sales, while American Bitcoin's headline profit was more closely tied to the changing value of its digital assets.
The comparison does not make the companies directly interchangeable. Mining fleets, electricity arrangements, debt levels, reserve policies and hosting operations differ widely across the sector. Yet the results show that reported net income can move sharply with bitcoin prices even when block-generation economics deteriorate.
Shares remained sharply lower for the year
American Bitcoin shares closed down 5.6% on Wednesday before rising 2.4% in extended trading after the earnings release, according to Nasdaq trading data. Even with the after-hours rebound, the stock was down 76% year to date.
The market reaction suggests traders weighed the profit turnaround against weaker mining fundamentals. The company delivered a substantial quarterly net-income swing and increased its bitcoin reserve, but its core operating indicators'revenue, production, gross profit and gross margin'all declined from the previous quarter.
With network difficulty at record levels, future results will depend heavily on whether American Bitcoin can control production costs, improve fleet efficiency and maintain enough bitcoin liquidity to cover operations without materially reducing its reserve.
Learn how miners navigate bitcoin’s swings and asset gains in our guide on crypto mining fundamentals today.
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