Some mining companies have encountered problems servicing loans secured by bitcoin mining equipment. Estimated Bloombergthe total risk for creditors can reach $4 billion.
The situation arose both due to the deterioration of the situation in the cryptocurrency market, and due to the negative revaluation of ASIC devices.
So far, only a few miners have defaulted on their loans, but recent sales of mined bitcoins are showing signs of a crisis. The agency recalled the implementation of Core Scientific 2000 BTC to cover operating costs and Bitfarms 3000 BTC – to pay off part loan to Galaxy Digital Holdings Ltd for $100 million.
Price dynamics for ASIC devices
Bloomberg predicted the aggravation of problems in the industry in the event of a continued decline in the price of bitcoin. This could lead to further adjustments in the valuation of the devices and their sale by lenders. According to Luxor Technologies Corp., the price of the popular Antminer S19 is down about 47% from $10,000 in November.
“Mining companies are in pain. Many operations became unprofitable. The cost of equipment has plummeted. […]. This is exacerbated by volatile electricity prices and limited supply of space in data centers.” said Luka Jankovic, head of lending at Galaxy Digital.
The latter, as well as NYDIG, BlockFi, Celsius Network, Foundry Networks and Babel Finance, have been actively lending against the security of equipment, said Ethan Vera, co-founder of the Luxor Technologies mining pool. They worry about the “health” of their loan portfolios, he said, especially those with high collateral ratios. The specialist estimated the volume of such loans at $4 billion.
Bitcoin mining cost
According to Arcane Research analyst Yaran Mellerud, assuming average electricity prices and using the latest ASIC devices, the cost of mining 1 BTC could be $8,000. Even while maintaining profitability, it will be difficult for some companies to do without selling bitcoin to fulfill their loan obligations, the expert added.
Securitize Capital CEO Wilfred Day allowed the exit of a number of miners who lost the opportunity to generate positive cash flow and purchased expensive equipment. According to the expert, taking into account overhead costs and interest on loans, the cost of mining 1 BTC for them can exceed $20,000.
“They bought tens of thousands of machines, agreed on hosting, made deposits and now they cannot fulfill their obligations,” Day explained.
Will Foxley, Chief Content Officer at Compass Mining, said that the cost of raising capital is rising due to deteriorating risk appetite.
Recall that on June 22, the hashrate of the Bitcoin network dropped below 200 EH/s. On June 11 he made highest ever 231 EH/s.
Previously, Glassnode analysts recorded surrender of the miners after the fall in the price of bitcoin below $20,000.
Read Cryplogger bitcoin news in our Telegram – Cryptocurrency news, courses and analytics.
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Some mining companies have encountered problems servicing loans secured by bitcoin mining equipment. Estimated Bloombergthe total risk for creditors can reach $4 billion.
The situation arose both due to the deterioration of the situation in the cryptocurrency market, and due to the negative revaluation of ASIC devices.
So far, only a few miners have defaulted on their loans, but recent sales of mined bitcoins are showing signs of a crisis. The agency recalled the implementation of Core Scientific 2000 BTC to cover operating costs and Bitfarms 3000 BTC – to pay off part loan to Galaxy Digital Holdings Ltd for $100 million.
Price dynamics for ASIC devices
Bloomberg predicted the aggravation of problems in the industry in the event of a continued decline in the price of bitcoin. This could lead to further adjustments in the valuation of the devices and their sale by lenders. According to Luxor Technologies Corp., the price of the popular Antminer S19 is down about 47% from $10,000 in November.
“Mining companies are in pain. Many operations became unprofitable. The cost of equipment has plummeted. […]. This is exacerbated by volatile electricity prices and limited supply of space in data centers.” said Luka Jankovic, head of lending at Galaxy Digital.
The latter, as well as NYDIG, BlockFi, Celsius Network, Foundry Networks and Babel Finance, have been actively lending against the security of equipment, said Ethan Vera, co-founder of the Luxor Technologies mining pool. They worry about the “health” of their loan portfolios, he said, especially those with high collateral ratios. The specialist estimated the volume of such loans at $4 billion.
Bitcoin mining cost
According to Arcane Research analyst Yaran Mellerud, assuming average electricity prices and using the latest ASIC devices, the cost of mining 1 BTC could be $8,000. Even while maintaining profitability, it will be difficult for some companies to do without selling bitcoin to fulfill their loan obligations, the expert added.
Securitize Capital CEO Wilfred Day allowed the exit of a number of miners who lost the opportunity to generate positive cash flow and purchased expensive equipment. According to the expert, taking into account overhead costs and interest on loans, the cost of mining 1 BTC for them can exceed $20,000.
“They bought tens of thousands of machines, agreed on hosting, made deposits and now they cannot fulfill their obligations,” Day explained.
Will Foxley, Chief Content Officer at Compass Mining, said that the cost of raising capital is rising due to deteriorating risk appetite.
Recall that on June 22, the hashrate of the Bitcoin network dropped below 200 EH/s. On June 11 he made highest ever 231 EH/s.
Previously, Glassnode analysts recorded surrender of the miners after the fall in the price of bitcoin below $20,000.
Read Cryplogger bitcoin news in our Telegram – Cryptocurrency news, courses and analytics.
Found a mistake in the text? Select it and press CTRL+ENTER
