Riot Platforms, a Bitcoin mining company, has shifted its strategy to rely on energy credits from selling power back to the Texas grid to mitigate losses. The company recently earned $31.7 million in energy credits, surpassing the value of its Bitcoin mining revenue. The move comes after the crypto market reversed in 2022, leading to significant losses for Riot Platforms. Despite the challenging market conditions, Bitcoin’s recovery in 2023 boosted Riot’s stock.
The company’s unique power strategy aims to make it one of the lowest-cost producers of Bitcoin in the industry. Bitcoin miners overall have faced challenges due to low trading volume and ballooning energy prices, prompting them to seek alternative sources of income. Riot Platforms has a mutually beneficial relationship with the Electric Reliability Council of Texas (ERCOT), wherein the agency pays miners to reduce power consumption to alleviate strain on the grid. The credits earned by Riot comprise energy sold back to the ERCOT grid and demand response credits. Texas has become an ally of the Bitcoin mining industry, offering financial incentives. However, a bill to cut off the mining industry from these credits ultimately stalled.