American Bitcoin Reports $126 Million Profit Driven by Bitcoin Holdings Surge

American Bitcoin Corp. (Nasdaq: ABTC) has reported a net income of approximately $126 million for the third quarter of 2023, marking a significant turnaround from a $57.2 million loss in the previous quarter. This profit was largely attributed to a substantial $197.3 million gain on the company's Bitcoin holdings, rather than from mining operations.

Based in Miami, American Bitcoin, which is a majority-owned subsidiary of Hut 8 Corp. and co-founded by members of the Trump family, mined around 891 Bitcoin during the quarter at an average cost of $42,100 each. By the end of September, the company held about 8,427 BTC, reflecting a growth in its strategic reserve.

Despite the impressive profit figures, the mining revenue saw a decline, totaling approximately $63.4 million, down from $67 million in the prior quarter. The gross profit margin also fell to 41%, down from 49% in Q2, primarily due to increased seasonal power costs. Adjusted EBITDA reached about $221 million, a significant improvement from an adjusted EBITDA loss of $45 million in the previous quarter.

CEO Mike Ho highlighted that the company managed to increase its Bitcoin reserves without issuing new shares or purchasing Bitcoin on the open market. The strategic reserve grew by 425 BTC, or about 5%, while the company sold a portion of its production to cover operating costs.

Looking ahead, the future performance of American Bitcoin will depend on the volatility of Bitcoin prices, which are currently fluctuating around $80,500. The company faces the challenge of maintaining profitability amid rising power costs and thinner mining margins.