American Bitcoin’s $126M Profit Highlights the Cost of Staying Mining-Focused
American Bitcoin’s $126 million quarterly profit says more about the value of its Bitcoin reserves than the health of its mining business. A $197.3 million noncash gain on those holdings lifted net income, while mining revenue and gross profit both fell.
The contrast puts the company’s strategy in focus. Rivals Riot Platforms, MARA Holdings and Core Scientific are pursuing AI infrastructure for new revenue, while American Bitcoin continues to mine and accumulate BTC. My read is that the results sharpen the question of how well that approach can hold up as mining costs rise.
Holdings lifted earnings as mining margins narrowed
American Bitcoin reported $126 million in net income for the quarter, compared with $3.5 million in the same period a year earlier. Without gains tied to its Bitcoin holdings, the company would have posted an operating loss of about $5.5 million, according to its financial statements. It also recorded a $64.3 million loss on derivatives.
Mining revenue slipped 5.5% from the previous quarter to $63.4 million, missing analysts’ $74.35 million estimate by nearly 15%, according to Yahoo Finance data. Revenue was also slightly below the $64.2 million recorded a year earlier.
The company mined 891 BTC, down from 932 BTC in the prior quarter. Its cost to mine one Bitcoin climbed about 15% to $42,100, with higher electricity prices cited as the main driver. Gross mining profit fell from $33 million to $25.8 million, and the reported mining margin contracted from 49% to 41%.
CEO Mike Ho said the company mined Bitcoin “at a structural discount to spot” despite seasonal power cost pressures. Earnings per share came in at $1.73, above the $0.26 analyst consensus reported by Yahoo Finance. Yet the revenue miss and shrinking mining returns tell a less buoyant story than the headline profit.
Miners are weighing Bitcoin against AI infrastructure
American Bitcoin’s peers are looking to AI for another way to monetize power and data center capacity. Riot is building large AI data centers, according to its latest earnings. MARA is expanding into AI while continuing to mine Bitcoin, and Core Scientific has already shifted much of its business toward AI data centers.
American Bitcoin is taking a different path. It held 8,427 BTC at the end of September, up from 3,418 BTC a year earlier. That accumulation can increase exposure to Bitcoin’s price, but it doesn’t by itself resolve the economics of producing new coins.
David Gamble, founder of Enigma Holdings, an asset manager focused on Bitcoin mining and AI infrastructure, said mining below Bitcoin’s market price does not automatically create shareholder value. He also questioned the long-term sustainability of an accumulation strategy as network difficulty rises and miners need to keep investing in efficient equipment.
“The real competitive advantage in this industry is shifting toward energy infrastructure,” Gamble said. “It’s no longer just about how much Bitcoin you can mine or how much hashrate you can deploy.”
That shift has practical limits. Bitcoin miners and AI companies compete for power, and AI data centers may earn more than mining operations in some locations. But, Gamble cautioned, a mining site can’t necessarily switch uses without accounting for depreciation, equipment replacement, financing costs and the value of other ways to deploy capital.
Market reaction keeps the operating picture in view
Bitcoin traded at $76,119, down 5% over the preceding 24 hours, as of 8:50 p.m. UTC, according to CoinGecko. American Bitcoin shares closed Thursday about 15% lower at $5.31.
The quarter leaves a clear operating question for American Bitcoin: can higher efficiency and continued BTC accumulation compensate for falling output and tighter margins? Its earnings show how a rising value for reserves can dominate a quarter’s results, while the mining business itself faces pressure to control power costs and fund better equipment.
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