CoinShares expert Matthew Kimmell believes that the sale of mining equipment to subsidiary Celsius could lead to a drop in miner prices and increase negative pressure on the market.
CoinShares analyst Matthew Kimmell has joined experts concerned that the mining subsidiary of troubled Celsius cryptocurrency lender Celsius Mining has filed for creditor protection.
“The sale of Celsius Mining miners will increase the pressure on falling prices for cryptocurrency mining equipment,” Kimmell said.
Industry analysts have suggested that Celsius Mining could sell around 120,000 miners to raise cash. This can reduce the price of the equipment. If the cost of miners and bitcoin falls sharply, the cryptocurrency market may collapse.
Already, some of the most popular miner models have dropped 50% since the last bull run. At the same time, Kimmell believes that Celsius will go all the way to repay the debts.
“It looks like Celsius will try to keep at least some of the activity of Celsius Mining after the restructuring of the company in order to receive bitcoins and pay off some of its obligations,” the analyst said.
The expert noted that although the price of bitcoin has fallen by almost 70% compared to the November high, and many miners are experiencing difficulties, cryptocurrency mining equipment may be in demand if Celsius decides to get rid of it.
“This will provide an opportunity for successful miners to expand based on their capabilities, the cost of electricity and the efficiency of Celsius hardware,” he said.
Ethan Vera, COO of cryptocurrency mining services provider Luxor Technologies, confirmed that the cost of mining equipment is falling.
“Our sales team typically sees 10-15% market slippage if equipment costs drop rapidly. For miners, this will likely mean losing 60-70% of their initial investment,” Vera said.
Recall that last week Celsius filed for “immediate” bankruptcy in the Southern District of New York, in accordance with the provisions of Chapter 11 of the US Bankruptcy Code.
Source: Bits
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