American Bitcoin Posts $126M Profit as Mining Margins Narrow

American Bitcoin reported $126 million in quarterly net income on Wednesday, but $197.3 million of that figure came from a noncash gain on its Bitcoin holdings — stripping it out, the company posted an operating loss of roughly $5.5 million, according to its financial statements.

The Eric Trump-backed miner also recorded a separate $64.3 million loss on derivatives during the quarter. The gap between headline profit and operating reality frames the central question now facing Bitcoin miners that double as treasury vehicles: what does a $126 million profit actually change for the underlying business?

For American Bitcoin, the answer is: less than it appears.

Where did the profit come from?

Mining revenue fell 5.5% quarter over quarter to $63.4 million, missing analyst estimates of $74.35 million by nearly 15%, according to Yahoo Finance data. The company mined 891 BTC, down from 932 BTC in the previous three months.

The cost to mine a single BTC rose approximately 15% to $42,100, which the company attributed primarily to higher electricity prices. Gross mining profit fell from $33 million to $25.8 million, and the reported mining margin contracted from 49% to 41%.

Earnings per share came in at $1.73, far above the analyst consensus of $0.26 — but the beat was almost entirely an artifact of mark-to-market gains on the treasury rather than operational improvement.

"Despite seasonal power cost pressures, we continued mining Bitcoin at a structural discount to spot," CEO Mike Ho said in Wednesday's earnings announcement.

Why analysts question the accumulation strategy

American Bitcoin held 8,427 BTC at the end of September, up from 3,418 BTC a year earlier. Revenue was essentially flat year over year, slipping from $64.2 million to $63.4 million, while reported profit jumped from $3.5 million to $126 million on the strength of those holdings.

David Gamble, founder of Enigma Holdings, an asset manager focused on Bitcoin mining and AI infrastructure, said the headline number does not tell the full story of the mining business.

"Ultimately, mining Bitcoin below its market price doesn't automatically mean you're creating shareholder value," Gamble told Cointelegraph.

"I don't necessarily think their accumulation strategy is flawed, but I do think it raises questions about long-term sustainability," he added, citing rising mining difficulty and the continuous capital required for newer, more efficient hardware.

What does the divide mean for the sector?

The results expose a strategic split among large-scale miners. Riot Platforms is building large AI data centers, per its latest earnings. MARA Holdings is expanding into AI while continuing to mine Bitcoin. Core Scientific has already moved much of its business toward AI data centers. American Bitcoin, by contrast, keeps compounding its BTC reserve.

"The real competitive advantage in this industry is shifting toward energy infrastructure," Gamble said. "It's no longer just about how much Bitcoin you can mine or how much hashrate you can deploy."

He cautioned that the pivot is not free: miners and AI operators now compete for the same power supply, and while AI data centers can out-earn mining in some markets, conversion demands depreciation, equipment replacement, financing costs and the opportunity cost of capital deployed elsewhere.

Markets delivered their own verdict. Shares of American Bitcoin (ABTC) closed Thursday down about 15% at $5.31, while Bitcoin traded at $76,119, down 5% over 24 hours, according to CoinGecko.

With mining margins compressing and difficulty rising, the next several quarters will test whether a pure accumulation model can keep absorbing a widening cost curve — or whether the AI-infrastructure shift by Riot, MARA and Core Scientific sets the template the rest of the industry must eventually follow.