Crypto News – According to Riot Platforms, its bank sheet may be impacted by an ongoing chip shortage, the continued need to increase the hash rate, and the growing pro-climate movement in the US.
Riot Risk Warning: Chip Shortage and Climate-Focused Regulations Could Cut Profits
In its Feb. 23 annual 10-K filing, which includes a section on risk factor disclosures, Riot highlighted more than 13 significant risks that are explicitly related to its future profitability as a Bitcoin miner. Because so few manufacturers are able to produce the “highly specialized” ASIC chips that Riot depends on, one of the risk concerns that Riot emphasized was the current global chip crisis.
The ongoing global supply chain crisis, coupled with increased demand for computer chips, has created a shortfall of semiconductors,
Riot
Riot Predicts It Will Pay Higher-Than-Normal Prices for Mining
Riot and manufacturer MicroBT agreed in December to purchase 66,560 miners for $291 million. According to Jason Les, CEO of the company, it was the largest order of hash rate in its history. Riot stated in its most recent annual report that until the chip shortage issue is remedied, it anticipates continuing to pay “higher than usual” prices to acquire and deploy the mining equipment.
Riot pointed out that even if they had access to ASIC miners, they might still run into design flaws. A more competitive industry, according to Riot, poses a risk as well. To preserve its market share, the company must keep raising its hash rate in tandem with the worldwide hash rate.
To compete in this highly competitive industry, we believe we will need to continue to acquire new miners, both to replace those lost to ordinary wear-and-tear and other damage and to increase our hash rate to keep up with a growing global network hash rate.
Riot
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