At the peak of the collapse of the world’s former second-largest cryptocurrency exchange FTX, the disgraced founder, Sam Bankman-Fried, placed his biggest bet with the Bitcoin mining business Genesis Digital Assets.
According to a story that was published by Bloomberg on December 2nd, Alameda kept pouring money into the company even though the price of Bitcoin was falling and rising energy costs were wreaking havoc throughout the sector.
During a capital round in April, Alameda and FTX made their largest venture investment to date, which resulted in the firm being valued at $5.5 billion.
Alameda invested a total of four unique amounts of funds into the cryptocurrency miner. In August of this year, it made an investment of around $100 million in the miner. It made an initial investment of $550 million in January, accompanied by further investments of $250 million in February and April.
It is interesting to note that the news of Alameda’s investment in Bitcoin mining came only a few hours after it was disclosed that the venture arm had helped save FTX in the previous year.
The venture capital business contributed up to one billion dollars to FTX’s operation. This occurred as a result of the failure of the exchange’s infrastructure to protect it from the leverage that a client had on a token.
Moving forward, when Genesis was at its strongest, its trading assets totaled approximately $5 billion. According to the dashboard provided by Arkham Intelligence, the value of the company’s trading assets was around 238 million dollars at the time this article was written.
Given the price drop of Bitcoin, skyrocketing energy prices, and increased rivalry among miners, the business of Bitcoin mining moved from being one of the most profitable corners of the crypto world to being one of the most distressed sectors in a very short amount of time.
Due to a crucial mining income gauge reaching an all-time low, some of the industry’s most prominent mining corporations are on the brink of going bankrupt.
Genesis Digital initiated an aggressive growth strategy across the United States after receiving the funds. As a result of the company’s success in securing more than 700 megawatts of electricity for its mining operations in Texas, South Carolina, and North Carolina during the first half of 2022, the business has become one of the most important Bitcoin miners in the United States.
How the Bitcoin mining industry is doing
Source: https://www.cryptopolitan.com/alameda-ftx-invested-heavily-in-bitcoin-miner-genesis-digital/