SOS Limited Halts Internal Bitcoin Mining, Shifts Focus to Hosting Services After $7.5 Million Offering

Executive Summary

SOS Limited, a company listed on the New York Stock Exchange, has announced the temporary cessation of its internal Bitcoin mining operations. This strategic move reallocates resources towards its third-party mining hosting services, a segment experiencing increasing demand. The decision follows the company's recent registered direct offering in July 2025, which raised $7.5 million.

The Event in Detail

SOS Limited reported its semi-annual financial results for the six months ended June 30, 2025, detailing a significant pivot in its operational strategy. Effective immediately, the company has temporarily shut down its internal Bitcoin (BTC) mining operations. The rationale behind this decision is to prioritize and expand its third-party mining hosting services, which the company states have demonstrated strong and increasing demand.

Financially, SOS Limited conducted a registered direct offering in July 2025, raising gross proceeds of $7.5 million before deductions for fees and expenses. This offering involved the sale of 2,142,855 American Depositary Shares (ADS) and concurrent private placement of warrants to purchase up to 4,285,710 ADSs. The combined effective offering price for each ADS and its accompanying warrants was $3.50. Each warrant is immediately exercisable with an exercise price of $3.50 per share and a five-and-a-half-year expiry.

The semi-annual report for H1 2025 indicated net revenue of $89.6 million, marking a 48.1% increase from $60.5 million in the same period of the prior year. Commodity trading accounted for the majority of revenue at 94.9% or $85 million, while hosting services contributed 4.3%. The company reported a GAAP net loss attributable to ordinary shareholders of $14.2 million, compared to a net loss of $10.9 million in H1 2024. A gross margin of -1.5% was reported, attributed to a decline in the fair market price of key commodities like rubber and petroleum coke. Operating costs increased by 56.5% to $90.9 million. Notably, general and administrative expenses decreased by 35.0% to $9.4 million, primarily because mining machines had been fully impaired, leading to no depreciation expense in this period. As of June 30, 2025, cash and cash equivalents stood at $4.2 million, a decrease of $242.5 million from the prior year, largely due to a $228.4 million prepayment for the accelerated development of a proprietary blockchain commodity trading platform.

Market Implications

SOS Limited's cessation of internal Bitcoin mining signals a potential re-evaluation of business models within the publicly traded crypto mining sector. This move suggests increasing operational costs or diminishing returns for direct self-mining operations, prompting a shift towards more stable, service-oriented revenue streams like hosting. The company's emphasis on the "strong and increasing demand" for third-party hosting indicates a growing market for specialized infrastructure services in the crypto space.

This strategic pivot contrasts with companies like Strategy (formerly MicroStrategy), which continues its aggressive Bitcoin accumulation strategy. Strategy reported a net income of $10.02 billion in Q2 2025, largely driven by Bitcoin's price appreciation, holding 628,791 BTC at an average purchase price of $73,277. This highlights the divergence in corporate strategies regarding direct cryptocurrency exposure versus service provision.

Broader Context

The decision by SOS Limited aligns with a broader trend among cryptocurrency mining firms to diversify revenue streams and mitigate risks associated with the volatile price of digital assets and the increasing complexity of mining operations. Another example of this trend is Riot Platforms, which has strategically expanded into artificial intelligence (AI) and high-performance computing (HPC) services. Citigroup upgraded Riot Platforms to a "Buy" rating, citing optimism regarding its aggressive expansion into AI and HPC, positioning it as a broader technology play rather than solely a crypto stock.

SOS Limited's pivot reflects a maturing industry where companies are optimizing capital allocation by focusing on segments with demonstrated demand and potentially higher, more predictable profitability. The company's significant reliance on commodity trading, contributing 94.9% of its revenue, further underscores its existing diversification strategy beyond pure cryptocurrency operations. This evolving landscape suggests a future where crypto infrastructure providers may increasingly offer a range of specialized computing services, moving beyond solely proprietary mining endeavors.