miners Bitcoin (BTC) without money Reduce borrowing and reduce its operations as an industry Cryptocurrency mining It is still facing a decline in the price of the digital asset.
During the historic cryptocurrency rush in late 2021, miners racked up billions of dollars in debt to fund their expanding operations. But Since the crash early last year, publicly traded miners have refinanced and sold currency reserves and stocks to pay off loans and cover operating costs..
“Miners are trying to reduce leverage to avoid margin calls or an imminent liquidity crisis if bitcoin falls below a certain price,” said Wolfie Chow, an analyst at crypto consultancy Blocksbridge.
mining companies such as marathon Raised hundreds of millions of dollars in cryptocurrency-backed loans from crypto-friendly banks such as Silverjetwhich was reeling from the collapse of the cryptocurrency industry.
the scientific basicthe largest bitcoin miner by computing power, was the first major publicly traded miner to announce it. bankruptcy In December, citing Low bitcoin prices and rising energy costs are among the causes of cash flow problems. The Austin, Texas-based company is trying to come up with a plan to pay off its creditors.
Last month, the Dune Marathon was canceled $30 millionwhich increased the unrestricted cash flow to more than $100 millionAccording to BlocksBridge.
Funds raised from debt issuance by 15 major publicly traded miners have shrunk since the first quarter of 2022 and, for the first time in the third quarter, shrank by $112.6 million, according to data compiled by BlocksBridge.. That compares to totals of $348 million and $188 million in the first and second quarters, respectively, BlocksBridge said. generally, Net spending on mining infrastructure fell 77% to $180 million in the third quarterCompared to the previous quarter, the company’s latest data revealed.
Any sudden drop in the price of Bitcoin can lead to a massive rally Liquidity crisis. Bitcoin soared to over $45,000 in March 2022, but fell a month later to $29,000 when the Terra/Luna cryptocurrency crashed, wiping out an estimated $40 billion in the cryptocurrency market. The Fed’s ultra-tight monetary policy and the implosion of large digital asset firms such as the hedge fund Three shares of capital and cryptocurrency broker FTX, also affected the price of the token over the past year. Bitcoin is down about 65% in 2022.
Some like miners Riot pads And Bitfarms They started selling their currency reserves last year to increase liquidity. Marathon, which tends to keep its mined coins, still has 12,232 bitcoins on its balance sheet. About 36% of the reserve is restricted, secured by its outstanding loans through December 31, according to BlocksBridge.
Core Scientific and Riot sold shares to raise funds amid the crisis. the Argo Blockchain He proposed a share issue last year, though the offering never took place.