American Bitcoin reported approximately $126 million in third-quarter net income after a sharp increase in Bitcoin’s value generated a $197.3 million non-cash gain on its digital assets. According to the company’s official third-quarter results, the accounting gain transformed a quarter of weaker mining economics into a substantial reported profit, reversing a $57.2 million net loss in Q2. Revenue nevertheless declined to $63.4 million from $67 million in the previous quarter.
The underlying income statement is more nuanced than the headline profit suggests. Operating income reached $191.8 million after including the $197.3 million digital-asset gain, implying an operating loss of roughly $5.5 million if that fair-value adjustment is removed. A separate $64.3 million derivatives loss then reduced pre-tax income to $127.6 million. The often-cited $69.8 million pre-tax loss excluding Bitcoin appreciation therefore combines operating results with a major derivative valuation loss and should not be treated as a pure mining loss.
Mining Margins Narrow as Power Costs Rise
American Bitcoin mined approximately 891 BTC during Q3, down from 932 BTC in the second quarter. Cost to mine increased from about $36,500 to $42,100 per Bitcoin, which management attributed primarily to higher seasonal electricity costs. Gross profit fell to $25.8 million from $33 million, while gross margin contracted to approximately 41% from 49%. The mining operation remained gross-profitable, but production declined while the cost associated with each mined Bitcoin increased materially.
The margin compression mirrors pressures visible elsewhere in the listed mining sector. MARA, for example, previously reported higher energy costs alongside weaker Bitcoin mining economics, illustrating how electricity expenses and Bitcoin pricing can pull reported results in opposite directions. For miners holding substantial Bitcoin reserves, operating performance and treasury revaluation increasingly need to be evaluated separately.
American Bitcoin’s Adjusted EBITDA underscores that accounting distinction. The company reported $220.8 million, compared with a $45 million loss in Q2, but its reconciliation leaves the $197.3 million digital-asset gain inside the metric while adding back the $64.3 million derivative loss. Mechanically removing the Bitcoin gain would reduce that reported Adjusted EBITDA to roughly $23.5 million, although that is not a company-reported non-GAAP measure.
Bitcoin Reserve Grows Despite 465 BTC Sale
American Bitcoin ended September with 8,427 BTC, up 425 BTC from 8,002 at the end of June. The company made no open-market Bitcoin purchases and issued no shares through its ATM program during the quarter. It mined 891 BTC but sold approximately 465 BTC for $36.3 million to cover operating expenses. Reserve growth therefore came from retaining roughly half of quarterly production rather than purchasing additional Bitcoin with new equity capital.
The reserve figure also carries an important encumbrance. Approximately 3,090 BTC were pledged under miner-purchase agreements with Bitmain, leaving the pledged coins economically distinct from unrestricted Bitcoin held in custody. Headline treasury size consequently exceeds the portion of Bitcoin that is freely available without reference to those equipment agreements.
That treasury strategy differs from miners increasingly redirecting infrastructure toward AI and high-performance computing. Some operators have converted Bitcoin mining sites into AI data centers, while others continue building crypto reserves despite rising production costs. American Bitcoin remains concentrated on mining and Bitcoin-per-share growth, leaving its financial results particularly sensitive to both power economics and fair-value movements in its treasury.
CEO Mike Ho said the company’s objective is to mine Bitcoin at a “structural discount to spot.” Q3 supports that claim on the company’s stated $42,100 cost-to-mine metric, while simultaneously showing that higher electricity costs can compress margins even when Bitcoin appreciates sharply. The quarter’s $126 million profit therefore reflects two separate economic engines: a positive mining gross margin and a much larger mark-to-market gain on accumulated Bitcoin.
