v3.26.1
DERIVATIVE ASSETS AND LIABILITIES
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE ASSETS AND LIABILITIES DERIVATIVE ASSETS AND LIABILITIES
Bitcoin option and selling contracts
The Company purchased Bitcoin option contracts that provide it with the right, but not the obligation, to sell digital assets at a fixed price. The Company also entered into contracts and earned premiums by agreeing to sell Bitcoin if the Bitcoin price reached specific targets.

On March 16, 2026, Reliz Ltd., the operating entity of BlockFills, a Chicago‑based cryptocurrency brokerage, trading platform, and liquidity provider, filed voluntary petitions for relief under Chapter 11 restructuring proceedings of the United States Bankruptcy Code. Prior to March 16, 2026, in connection with its Bitcoin option and selling contracts, the Company closed all outstanding contracts with BlockFills. During the six months ended June 30, 2026, the Company recorded a credit loss expense for the $4,218 receivable from BlockFills related to the closed contracts and was recorded in Other Expenses in the unaudited condensed consolidated statements of operations.
Bitcoin redemption options
Starting in November 2024, the Company entered into purchase orders of Miners with a supplier which allows the Company to pay for the Miners in cash, Bitcoin or a combination of both. The right to redeem the Bitcoin ("Bitcoin Redemption Option") meets the definition of an embedded derivative. As of December 31, 2025, the Company no longer held any Bitcoin Redemption Options.

Capped call transactions
In October 2025, in connection with the 2025 Convertible Notes (as defined in Note 13 below), the Company entered into capped call transactions ("2025 Capped Calls"), with a cap price of $11.88 per share (representing a 125% premium over the reference price). The 2025 Capped Calls do not meet the scope exception from derivative accounting, as they fail the equity classification requirements as the Company cannot settle these transactions by means other than cash and are therefore treated as a derivative asset, which are measured at fair value.

In connection with the U.S. Redomiciliation Transaction, the reference security under the 2025 Capped Calls became Keel common stock on the same one-for-one basis applicable to the exchange of Bitfarms common shares for Keel common stock. The number of underlying shares, strike price, cap price, and other substantive economic terms of the 2025 Capped Calls were unchanged. The Company evaluated the conformed terms under ASC 815 and concluded that the substitution did not change the existing derivative-asset classification or valuation model and did not result in a modification gain or loss.
NOTE 6:    DERIVATIVE ASSETS AND LIABILITIES (Continued)

The following table summarizes the derivatives and reconciles the fair value measurement, which are classified within Level 2 of the fair value hierarchy:
As of June 30,
As of December 31,
2026
2025
six-month period
twelve-month period
2025 Capped Calls
Bitcoin option and selling contracts
2025 Capped Calls
Bitcoin redemption options
Bitcoin option and selling contracts
Derivative Assets
Derivative Assets
Derivative Liabilities
Derivative Assets
Derivative Assets
Derivative Assets
Derivative Liabilities
Balance as of January 1,
5,200 
2,287 
(2,922)
— 
3,418 
— 
(128)
Initial recognition
— 
— 
— 
69,090 
1,072 
— 
— 
Purchases
— 
— 
4,122 
— 
— 
89,478 
64,965 
Settlement
— 
(5,363)
— 
— 
— 
(73,659)
(99,256)
Remeasurement recognized in statement of operations
73,600 
3,076 
(1,200)
(63,890)
(4,490)
(13,532)
31,497 
Balance as of period end
78,800 
— 
— 
5,200 
— 
2,287 
(2,922)
Total derivative assets
— 
2,287 
Total long-term derivative assets
78,800 
5,200 
Total derivative liabilities
— 
(2,922)

The following Gain on derivative assets and liabilities is recognized in the unaudited consolidated statements of operations:
Three months ended June 30,
Six months ended June 30,
2026
2025
2026
2025
Gain (loss) on Bitcoin options and selling contracts
Unrealized change in fair value of outstanding contracts
— 
6,566 
(1,553)
228 
Realized (loss) gain on settled contracts
— 
(4,564)
3,429 
225 
— 
2,002 
1,876 
453 
Gain (loss) on Bitcoin redemption options
Unrealized change in fair value
— 
1,672 
— 
(1,508)
Realized gain on settled options
— 
110 
— 
1,125 
— 
1,782 
— 
(383)
Gain on 2025 Capped Calls
Unrealized change in fair value
77,040 
— 
73,600 
— 
Gain on derivative assets and liabilities
77,040 
3,784 
75,476 
70 

Refer to Note 16 for more details of derivative instruments.