Bitcoin News- Almost $4 billion in mining-rig-backed loans are in jeopardy.
- Bitcoin miners who need to sell would continue to exert downward pressure.
Miners have been hit hard by the 21% decline in the price of bitcoin (BTC) since it peaked two weeks ago. According to a Bloomberg report, some mining-machine-backed debts are now insolvent according to experts. According to Luxor’s Ethan Vera, almost $4 billion in mining-rig-backed loans are in jeopardy. “They are nervous about their loan books, especially those with high collateral ratios,” Vera told Bloomberg’s, David Pan.
Affecting the Bitcoin Price Further
Current BTC exchange rates only allow a profit of around $0.05 per 1,000-kilowatt-hours (kWh) from 14 SHA256 mining machines, according to asicminervalue.com data. Miners from Bitmain and Microbt produce between $2 and $4.50 per day, with an electricity bill of roughly $0.05 per kWh for the best equipment.
To put pressure on the price even further during downturn markets, bitcoin miners have traditionally been required to liquidate their holdings. In another study, JPMorgan analyst Nikolaos Panigirtzoglou said that bitcoin miners who need to sell would continue to exert downward pressure on the BTC market.
According to JPMorgan’s Panigirtzoglou and his team of analysts, privately owned mining companies have sold a major portion of block subsidies to reduce operating expenses. Since February 2022, many reports have shown that miners have been selling a huge amount of BTC.
Glassnode’s on-chain experts revealed on June 2 that “Bitcoin miners have been net distributors since the recent sell-off.” A small number of crypto lenders have also been experiencing major difficulties in the last few weeks, and several are now liquidating their assets. Celsius, a cryptocurrency lending platform, has come under investigation from the crypto community for speculations of liquidations and bankruptcy.
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Source: https://thenewscrypto.com/bitcoin-btc-price-decline-hits-miners-hard-forcing-to-liquidate-holdings/