According to Woofun AI, the quarterly earnings report disclosed on Wednesday by American Bitcoin (ABTC.US) presented a highly deceptive financial picture: although the company announced a net profit of $126 million, with earnings per share reaching $1.73, far exceeding analysts' expectations of $0.26, this impressive figure stemmed mainly from a $197.3 million non-cash gain generated by its BTC holdings.
Strip away this paper gain, and the company was actually facing an operating loss of approximately $5.5 million, while recording a massive loss of $64.3 million in its derivatives business. This divergence between "paper wealth" and the underlying business fundamentals, set against the backdrop of Bitcoin's price falling to $76,119 at 8:50 PM UTC (a 5% drop over 24 hours), has triggered deep market questions about the long-term sustainability of its strategy. At Thursday's close, American Bitcoin (ABTC.US) shares fell by about 15% in response, closing at $5.31, reflecting shaken investor confidence in the profitability of a pure mining model.
Data compiled by Woofun AI shows that American Bitcoin's (ABTC.US) core mining business is being squeezed by both cost erosion and declining efficiency. Mining revenue for the quarter was $63.4 million, down 5.5% from the previous quarter and nearly 15% below analysts' expectations of $74.35 million. Meanwhile, the cost of mining each BTC rose by about 15% to $42,100, causing gross mining profit to shrink from $33 million in the prior quarter to $25.8 million, and the mining margin to fall from 49% to 41%. In terms of output, the company mined a total of 891 BTC this quarter, fewer than the 932 mined in the preceding three months. CEO Mike Ho argued in the earnings announcement that despite seasonal power cost pressures, the company continued its BTC mining operations at a level below the spot price.
However, this "below-market mining" logic has not been fully embraced by the market. David Gamble, founder of Enigma Holdings, an asset management firm focused on BTC mining and AI infrastructure, pointed out that mining below market price does not necessarily create value for shareholders, especially when mining difficulty keeps rising and companies must continuously invest in newer and more efficient technology to stay competitive, making the long-term sustainability of its accumulation strategy questionable. Notably, although revenue was essentially flat year over year (edging down from $64.2 million to $63.4 million), net profit surged from $3.5 million to $126 million, a sharp contrast that further confirms the non-operating nature of the profit source.
A deeper industry rift lies in the divergence of strategic paths. While American Bitcoin (ABTC.US) still insists on expanding its BTC reserves—by the end of September, its BTC holdings had surged from 3,418 a year earlier to 8,427—its competitors such as Riot Platforms (RIOT.US), MARA Holdings (MARA.US) and Core Scientific (CORZ.US) have turned to artificial intelligence in search of new revenue growth drivers. David Gamble stressed that the industry's real competitive advantage is shifting toward energy infrastructure, and the key metric is no longer the scale of computing power deployed or BTC output, but the ability to control power resources. BTC mining companies and AI data centers are competing for the same electricity supply, and in some scenarios, AI data centers may enjoy higher profit margins.
Yet the transition is not seamless. Gamble cautioned that existing mining facilities cannot be directly converted into AI-related businesses; equipment depreciation, replacement costs, financing costs and the opportunity cost of putting capital into other areas must all be considered. The high threshold of this structural conversion makes American Bitcoin's (ABTC.US) insistence look increasingly isolated, and also reveals the difficult balance traditional miners must strike between energy arbitrage and monetizing computing power. From a trend perspective, American Bitcoin's (ABTC.US) earnings report is not merely a single company's financial disclosure, but a microcosm of the BTC mining industry caught between the post-halving cycle and the explosive demand for AI computing power.
As power costs rise rigidly and the mining difficulty curve steepens, a model that relies solely on BTC price swings to generate non-cash gains can hardly mask operational fragility. Competitors' tilt toward AI infrastructure signals that the industry's valuation logic is being rebuilt from "scale of computing power" toward "energy efficiency and diversified applications." For companies still adhering to a pure mining strategy, how to cope with margin compression and capital expenditure pressure while maintaining BTC reserve growth will become the key variable determining their room to survive. This divergence indicates that future competition in the BTC mining industry will no longer be confined to on-chain output, but will extend to an underlying contest over energy infrastructure.
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