American Bitcoin's $126 million profit is a $197 million bitcoin gain on top of a mining shortfall

American Bitcoin Corp. (Nasdaq: ABTC) reported net income of about $126 million for the third quarter of 2026, but its 10-Q filing shows the result came from a $197.3 million gain on its bitcoin holdings, not from mining, according to the company's results release and quarterly report.

Three lines that make up the quarter

The company, a majority-owned subsidiary of Hut 8 Corp., mined about 891 bitcoin (BTC) in the quarter and held about 8,427 bitcoin at September 30, up from about 8,002 at June 30. Revenue was $63.4 million, against $64.2 million a year earlier, the filing shows.

Item, three months to September 30, 2026	Amount
Revenue	$63.4 million
Cost of revenue	$37.5 million
Depreciation and amortization	$28.6 million
Gain on digital assets	$197.3 million
Loss on derivatives	$64.3 million
Net income	about $126 million

Source: American Bitcoin's 10-Q and results release, rounded as the company reports them.

Subtracting cost of revenue and depreciation and amortization from revenue leaves a shortfall of about $2.7 million (computed from the rounded figures above). The company reported gross profit of about $25.8 million, a margin of about 41%, down from about $33.0 million and 49% in the second quarter, and said higher seasonal power costs contributed to the pressure.

Where the $197.3 million came from

The filing says the gain "reflects the increase in Bitcoin prices from approximately $59,847 to approximately $83,415, applied to our Bitcoin reserve." It measures bitcoin at fair value at each period end, using the price on the Coinbase exchange at midnight UTC.

The company also recorded a $64.3 million loss on derivatives, which the filing links to the bitcoin redemption and put options in its miner purchase agreements with Bitmain. Those options were carried as assets worth $115.7 million at September 30.

A cost to mine of $42,100 per bitcoin

The company put its cost to mine at about $42,100 per bitcoin in the third quarter, compared with about $36,500 in the second, and said it had mined at "a structural discount to spot." Revenue per bitcoin mined was about $71,100, against about $71,900 in the second quarter and about $114,097 a year earlier, the filing shows.

Mike Ho, the company's chief executive, said the company grew its reserve and raised satoshis per share by about 5%, "all without issuing shares through our ATM program or purchasing Bitcoin during the quarter."

The company said about 3,090 of its bitcoin were pledged for miner purchases under agreements with Bitmain.

A profit that moves with one price, in both directions

We think the quarter shows how a bitcoin-holding miner's profit depends on a price it does not control. The same fair-value rule that produced a $197.3 million gain would produce a loss if the closing price at a quarter end is lower than the one before, and the second quarter's net loss of about $57.2 million shows the reverse. We do not forecast price levels.

The opportunity is a reserve that grew about 5% in a quarter without issuing shares. The threat is that mining, by our arithmetic, did not cover depreciation, so the reserve is carrying the income statement. We would watch the cost to mine and the gross margin next to the net income line in the fourth quarter, and our view would soften if the cost to mine fell back toward the second quarter's level.

The view in this final section is FinanceInTime's editorial opinion, for information only. It is not investment, tax, legal or other advice, and it does not take your circumstances into account. Forecasts are uncertain and past results do not guarantee future ones.