On May 7, 2026, during the same earnings report season, two mining companies provided completely different answers. On one hand, North America's leading mining company Core Scientific reported total revenue of approximately $115.2 million for Q1 2026, significantly up from about $79.5 million in the same period last year, with a gross profit of about $30.1 million. Custodial business revenue soared to about $77.5 million, self-mining revenue was about $30.1 million, but it recorded a net loss of approximately $347 million at the accounting level, compared to a net profit of about $576 million in the same period last year. The stock price subsequently fell about 7% after hours. Management attributed the loss to non-cash impairments and changes in the fair value of warrants, but the market clearly was more concerned about this contradictory report of "revenue growth and profit collapse". On the other hand, American Bitcoin Corp chose to increase its asset positions against the trend during the same period, adding 300 Bitcoins amidst price fluctuations, bringing its total holdings to about 7,300, ranking 16th among corporate holdings. With the political backing of the Trump family, it proactively increased its exposure to Bitcoin's long-term trajectory. Standing against the backdrop of the industry after the 2026 halving, where block rewards are halved and competition for computing power intensifies, one company expands through custodial services while enduring the impact of accounting impairments, and the other amplifies price elasticity by holding large amounts of Bitcoin. This path differentiation is driving the market to conduct a new round of repricing for the business models and valuation systems of mining companies.

CoreScientific's Record Revenue and Huge Losses

In Q1 2026, Core Scientific reported total revenue of approximately $115.2 million, significantly up from about $79.5 million in the same period last year. The gross profit was about $30.1 million, indicating that under the combination of custodial services and self-mining, the main business still maintained a positive gross profit. However, the company's net result sharply turned from a net profit of about $576 million in the same period last year to a net loss of about $347 million, marking a significant reversal in the financial results within a year. Management emphasized in the earnings report that this substantial loss primarily stemmed from non-cash impairment losses and changes in the fair value of warrants, rather than corresponding operational cash outflows, highlighting that operational activities and accounting measurements do not align in this case. In other words, while revenue is expanding and gross profit remains positive, the net profit on the statement is "magnified" into a loss due to asset impairments and fair value adjustments of financial instruments. The breakdown of these impairments and fair value changes provided in the briefing is still noted as data pending verification, making it difficult to consider them as stable or replicable business norms at present.

The market's reaction to this combination of "record revenue and colossal net losses" has clearly leaned towards caution. After the earnings report was released, Core Scientific's stock price fell about 7% in after-hours trading, reflecting that investors remain highly sensitive to the scale of accounting adjustments, even knowing that the losses primarily consist of non-cash items. On one hand, such impairments and fair value changes weaken the capital buffers on the statements, raising the threshold for future profit recovery; on the other hand, it intensifies investors' concerns about asset quality and financing structure, making it challenging for revenue growth and positive gross profit to fully offset short-term pricing depression. This means that the market has begun to reassess the quality of mining companies' financial statements and risk structures with a more stringent perspective after the halving.

Custodial Growth Crisis for Self-Mining

In this earnings report, the shift in business structure is almost more striking than the profit and loss statement itself. In Q1 2026, Core Scientific's custodial business revenue was approximately $77.5 million, while the same period last year only stood at about $8.6 million, expanding nearly an order of magnitude in the short term and contributing to the majority of the company's revenue. During the same period, self-mining revenue was approximately $30.1 million, not only being surpassed by custodial revenues in absolute scale, but also significantly shrinking in its contribution to the company's revenue structure, entering a trajectory of year-on-year decline. For Core Scientific, which is seen as one of North America's largest Bitcoin miners, this means that the originally "self-mining" computing power and infrastructure are accelerating towards external openness, tilting towards a model of "mining for others and collecting rent".

The explosive growth of custodial revenue reflects the rising demand for specialized custodial services within the halving cycle: in an environment of reduced block rewards and intensified competition for computing power, more participants choose to entrust their equipment to large mining companies with scale, power, operational, and financing capabilities, in exchange for fixed or predictable fees to secure their survival space. For Core Scientific, this model is expected to bring a more stable cash flow curve, using custodial fees to some extent to hedge against fluctuations in Bitcoin prices and mining difficulty; however, at the same time, the pressure on self-mining revenue means that the "ceiling" on direct participation in upstream output is compressed, reducing elasticity against rising coin prices while fixed assets and operational costs still need to be amortized through higher custodial utilization rates. The dislocated trends between custodial and self-mining effectively trade off more predictable custodial income for reduced exposure to price cycles, which will reshape the future risk-return profile of the company: cash flow may be smoother, but sensitivity to one-sided market movements will also be repriced.

Non-Cash Impairments Amplify Valuation Volatility

From an accounting perspective, the enormous net loss of $347 million reported by Core Scientific this season is clearly primarily from non-cash impairments and changes in the fair value of warrants, rather than large cash outflows from operations. Impairment means that after the Bitcoin halving and the rise in network difficulty, the company needs to reassess the future cash flows that mining equipment, data center infrastructure, and long-term electricity procurement contracts can bring with more conservative assumptions. If the model is down-adjusted, the book value of these assets must be directly "cut", and the difference is accounted for in the current profit and loss. Derivative instruments such as warrants are then included in profit and loss through fair value adjustments during stock price volatility, making the profit and loss statement highly sensitive to short-term price fluctuations, with reported profits and earnings per share exaggerated into a "roller coaster".

In the pricing framework of traditional capital markets, institutions place greater importance on whether operational cash flows are positive, whether leverage levels are manageable, and whether capital expenditures match income structure adjustments while relegating one-time accounting losses to a secondary position and reconstructing valuation anchor points based on "sustainable operating capability". However, judging by the fact that the stock price still fell approximately 7% after the earnings report, non-cash losses continue to exert emotional pressure, as the market re-evaluates the asset-intensive model of mining companies post-halving: even if custodial services provide a smoother cash flow curve, impairment risks and fluctuations in derivatives are raising the risk premiums across the entire sector.

American Bitcoin's Contrarian Accumulation and Political Endorsement

Unlike Core Scientific, which bears impairments on the asset side while shifting towards custodial cash flows, American Bitcoin chose to increase its holdings against the trend during a period of price fluctuations in the same earnings season. The company added 300 Bitcoins during Bitcoin's recent turbulence, bringing total holdings to about 7,300, directly placing it 16th in the corporate ranking of Bitcoin holdings, entering the "top 20 club". In a market environment where mining companies generally reduce capital expenditures and prioritize maintaining cash flows after the halving, further placing the balance sheet on Bitcoin price itself is a strong directional bet. For the market, such an increase not only amplifies the company's exposure to Bitcoin’s long-term trajectory but also tightens the correlation between stock price and coin price, pushing American Bitcoin from a "mining company" to a position akin to a "Bitcoin asset vehicle".

What differentiates it further is the addition of political capital. American Bitcoin is supported by the Trump family, carrying clear political affiliation implications, while political capital inherently holds sway in discussions about cryptocurrency regulation in the U.S. Against a backdrop where regulatory paths are yet unclear, this endorsement can be interpreted as a partial hedge against policy risks, prompting the market to re-price its risk premium and valuation elasticity: on one end, Core Scientific, focusing on custodianship and impairments, attempts to use smoother cash flows to hedge against pricing cycles; on the other end, American Bitcoin, through enhancing its Bitcoin holdings and strengthening asset exposure, combined with political endorsement, shapes the narrative of being a "Bitcoin national strategy stock". These two models are being priced simultaneously by the capital market in the same halving cycle.

Acceleration of Differentiation Among Mining Companies Post-Halving

In the same earnings report season, Core Scientific and American Bitcoin displayed two nearly opposite paths: the former raised revenue to approximately $115.2 million in Q1 2026, with custodial business revenue soaring to about $77.5 million, self-mining revenue taking a back seat, yet recording a net loss of about $347 million under non-cash impairments and changes in fair value of warrants, seeing the stock price pull back about 7% after hours; while the latter chose to increase its holdings by 300 Bitcoins during the fluctuation of Bitcoin prices, with total holdings around 7,300, ranking 16th in corporate holdings and obtaining higher asset exposure for greater price elasticity. After the halving, with reduced block rewards, the revenue structure increasingly relies on electricity prices, computing power scale, and custodial client combinations. These differences in business models, asset structures, and risk preferences may magnify into significant disparities in valuation and stock price performance. When investors look at mining companies, it becomes difficult to evaluate using a single yardstick of “how much coin is produced and how much electricity is sold,” as they now need to dissect the sustainability of operational cash flows, the short-term disruptions caused by various accounting policies on net profit and shareholder equity, and the asymmetrical risks posed by large Bitcoin holdings during price increases and pullbacks, especially under the premise that many operational and financial data (such as custodial capacity, liquidity, note size, EBITDA, etc.) are still awaiting verification, warranting increased caution towards quarterly figures. Looking ahead to the next few quarters, strategies centered on custodial business expansion, self-mining layouts, and Bitcoin asset configurations will continue to elevate industry differentiation, making the next rounds of financial reports post-halving a critical observation window to test whether this round of mining company differentiation logic can materialize and who can stand firm under the new valuation framework.

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