Bloomberg Report Reveals That Miners Are Underwater With Almost $4 Billion In Bitcoin Miner Loans

On Friday, Bloomberg reported that Miners are struggling to repay around $4 billion in loans that are backed by their equipment.

The crypto market recently went through one of its rough patches in May and it still hasn’t come out of it. Experts too are divided on a bullish trend in the crypto space. The crypto bloodbath was triggered by Terra’s collapse along with some other factors. Flagship currencies Bitcoin and Ethereum went through major price drops, with the leading cryptocurrencies going below their support mark of $20,000 and $1000 respectively.

At the time of writing, the world’s leading cryptocurrency was trading at $21,299.28, up 1.30% in the past 24 hours. Meanwhile, the top altcoin’s price stood at $1,221.42, up by 2.84%. Experts predict that the bullish trends are high-sought after currently.

Analysts predict that the number of unpaid loans is increasing. According to the report, this is happening because mining rigs that were accepted as collateral by lenders are reduced by half. Co-founder of Luxor Technologies, a Seattle-based mining company, Ethan Vera in an estimation revealed that machines back around $4 billion in loans.

The report further states that till now a few miners have defaulted but some sold their Bitcoin reserves, leading to more pressure on prices. The cost of equipment can go further down in case lenders start to liquidate mining rigs that they repossess.

Head of lending at Galaxy DigitalLuka Jankovic, in a statement to Bloomberg, said that Bitcoin miners are going through a painful situation, a rough patch. The values of machines have dropped and are in the discovery phase, which is multiplied by limited rack space supply and volatile energy prices.

Though some big players in the mining industry are leveraging profit margins, not all are happy. Chief executive officer of Securitize Capita, Wilfred Daye told Bloomberg that some miners even cost above $20,000, almost the current price of Bitcoin.

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