- The Bitcoin (BTC) m0ners are struggling to repay debt.
- The mining firms are defaulting on machine-backed loans while some loans’ collateral is worth less than remaining payments.
According to the Bloomberg report, BTC miners are defaulting on loans and sending hundreds of thousands of machines that served as collateral back to lenders. They have raised as much as $4 Billion from mining-equipment financing when profit margins were as high as 90%.
New York Digital Investment Group, Celsius Network, BlockFi Inc., Galaxy Digital, and the Foundry unit of Digital Currency Group were among the biggest providers of funding to finance computer equipment and build data centers.
The Survival of BTC Miners Amid Bearish Phase
The whole year of 2022 was in bearish phase and impacting BTC miners as many of the publicly listed miners are having issues with their debt obligations.
It is crystal clear that Bitcoin mining is the backbone of the BTC ecosystem and miners as well. The return that BTC miners gain also projected insight into the BTC’s price performance and no doubt affected the whole crypto industry.
BTC Miners
Blockstream, a leading Bitcoin miner recently raised funds at a 70% discount. Its CEO, Adam Back stated that the fresh funding will be invested into its mining capacity expansion. It was valued at $3.2 Billion in its last Series B funding round that raised around $210 Million in August 2021. Its valuation fell by around 70% to below $1 Billion as per the Bloomberg report.
The industry experts state that the current bearish market phase may not end soon. Jaran Mellerud, a Bitcoin analyst for Hashrate Index, said a BTC mining bear market has a sustained period of revenue per kWh of less than $0.25. Bitcoin mining profitability can be evaluated by taking the miner’s revenue per kilowatt hour (kWh).
However his assumption is based on the calculation by using the most efficient Bitcoin mining machine on the market.
He recently noted that “Bitcoin mining investors are wrecked.” And also gave hope amid the harsh market condition, that “The only positive thing about this bear market is that the crypto industry is getting completely wrecked. Ultimately it will lead Bitcoin’s relative position to strengthen massively.”
Additionally, noted that the fears of distressed BTC miners creating selling pressure are blown up.
Source: https://www.thecoinrepublic.com/2022/12/10/is-the-bear-starving-for-btc-miners/