Bitfarms Q1 Loss Widens to $35.9M as Derivative Gains Shrink

The company attributed the widened deficit largely to a decline in financial income, which fell to $2.1 million, down from $11.4 million in Q1 2024.

Derivative Performance and Warrant Revaluations Hit Hard

The company’s latest Management’s Discussion and Analysis (MD&A) highlights several key factors behind the slump. The primary driver was a $3.4 million decrease in gains from revaluing warrant liabilities linked to Bitfarms’ 2023 private placement. According to the filing, the fair value of these liabilities declined at a slower pace than in prior quarters, reducing the accounting gains realized this period.

Bitfarms also reported a $6.2 million swing in performance from derivative-related instruments. This includes a $2.2 million net loss from its Bitcoin Redemption Option, and a $1.5 million loss from its Bitcoin One Program.

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Within the Bitcoin One Program, Bitfarms faced a $6.3 million unrealized loss on open positions, partially cushioned by $4.8 million in realized gains. In contrast, Q1 2024 featured a $2.5 million gain from unrealized appreciation in Synthetic HODL contracts, adding further to the unfavorable year-over-year comparison.

Outlook and Strategic Focus

While the core Bitcoin mining operations remain active, the financial complexities tied to hedging, options, and derivatives have added volatility to the firm’s bottom line. Bitfarms has not yet issued updated guidance but is expected to provide further commentary in its upcoming earnings call.

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