Riot Platforms, Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk Market risk is the risk to earnings or asset and liability values resulting from movements in market prices. The following discussion about our market risk exposure involves forward-looking statements. Actual results could differ materially from those projected in our forward-looking statements. For more information regarding the forward-looking statements used in this section and elsewhere in this Quarterly Report, see the Cautionary Note Regarding Forward-Looking Statements at the forepart of this Quarterly Report. Risk Regarding the Price of Bitcoin Our business and development strategy is focused on maintaining and expanding our Bitcoin Mining operations to maximize the amount of new Bitcoin rewards we earn. As of September 30, 2023, we held 7,327 Bitcoin with a carrying value of $151.8 million, all of which were produced from our Bitcoin mining operations. The carrying value of our Bitcoin assets reflects the $14.2 million of impairment charges we recorded against the value of our Bitcoin assets during the nine months ended September 30, 2023, due to decreases in the fair value of our Bitcoin after receipt. Bitcoin held are accounted for as indefinite-lived intangible assets. Bitcoin are measured on a first-in-first-out (“FIFO”) basis and measured for impairment daily based on the intraday low quoted price of Bitcoin. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the Bitcoin. Subsequent reversal of impairment losses is not permitted. We cannot accurately predict the future market price of Bitcoin and, as such, we cannot accurately predict whether we will record impairment of the value of our Bitcoin assets. The future value of Bitcoin will affect revenue from our operations, and any future impairment of the value of the Bitcoin we mine and hold for our account will be reported in our financial statements and results of operations as charges against net income, which could have a material adverse effect on the market price for our securities.