Categories: Finance

Miners struggle with credit in volatile bitcoin market

Miners struggle with credit in volatile bitcoin market

Representatives of the crypto industry believe that against the background of the fall of BTC and the growing cost of mining, the mining companies that pledged the equipment were in a desperate situation.

Several miners have already defaulted, some have sold bitcoin reserves, which has put additional pressure on the market. The cost of hardware could drop even lower if lenders start liquidating the mining rigs they have seized.

Mining company Core Scientific sold over 2,000 bitcoins to cover operating costs. Bitfarms has sold off half of the cryptocurrency to pay off part of its $100 million loan taken from Galaxy Digital Holdings. And then she took another loan secured by equipment from the New York Digital Investment Group.

Luka Jankovic, head of the credit department at Galaxy Digital, laments that bitcoin miners are having serious problems with loans:

“Hardware costs have plummeted and are still in the process of price formation, exacerbated by volatile electricity rates and the fall of bitcoin.”

Ethan Vera, co-founder of mining company Luxor Technologies, said that the total amount of loans raised by the industry to develop the hardware collateral business is about $4 billion. Securitize Capital CEO Wilfred Daye said that some large mining companies still make a decent profit, though “it may not be the case and not for everyone.” According to the businessman, the total costs of individual miners may already exceed $20,000, which corresponds to the current price of bitcoin.

After the fall of the cryptocurrency market, many miners began to turn off obsolete equipment, as it became unprofitable. Energy consumption by the BTC network fell by 25% in just a month. According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), back on June 6, the miners of the first cryptocurrency consumed 14.34 GW. Now the figure has dropped to 10.65 GW.

Source: Bits