According to a recent report from the Hash Rate Index, publicly traded Bitcoin (BTC) miners took on more than $4 billion worth of debt during the bullish phase of the cryptocurrency market. Seduced by rising prices, the industry rushed to buy application-specific Bitcoin miners on easy credit.
However, against the current backdrop of collapsing Bitcoin price, sky-high electricity prices, lower market prices for mining equipment, and record mining difficulty, 2022 turned out to be an extremely difficult year for players in the market. sector. That being said, some are holding up better than others.
Top 10 Publicly Traded Bitcoin Miners By Liabilities | Source: Hash Rate Index
On Jan. 3, Bitfarms announced that the company sold 1,755 BTC during December 2022 for a total of $29.9 million. The firm used this amount to pay off $16.5 million of its BTC-backed credit facility, along with $2.0 million of equipment-related debt.
Bitfarms was also successful in renegotiating miner purchase agreements, leading to extinguishing $45.4 million without penalty, while also establishing a $22.4 million credit for prepaid deposits to be applied against future purchase agreements. The company mined 5,167 BTC ($86.1 million at press time) during all of 2022 and had an outstanding balance of $47.0 million at the end of the year.
On the same day, Stronghold Digital Mining announced that it had reached an agreement to convert USD 17.9 million of its debt into preferred shares with a face value of USD 23.1 million. The preferred shares would bear no interest or dividends and would in turn be convertible into common shares (with negligible par value) at a conversion price of $0.40 per share, close to the closing market value of the shares of $0.44 of this edition.
Others were not so lucky. Cointelegraph previously reported on Dec. 21 that Greenidge signed a $74 million debt restructuring agreement with creditor NYDIG. The deal, if executed, would provide credit relief at the cost of restructuring the company from operating Bitcoin miners independently, to a hosting site for NYDIG’s Bitcoin mining equipment. Similarly, Core Scientific, one of the largest companies in the sector, secured a loan of USD 37.4 million, but is currently bankrupt.
Not all Bitcoin miners embarked on credit-driven expansion strategies. On January 3, Digihost announced that it had increased its BTC production by 60% a year. The company said it has no debt other than a $934,500 mortgage on its Alabama facility. Cointelegraph also previously reported on Dec. 21 that German Bitcoin miner Northern Data said the company had no financial debt as it expected to record $204 million in revenue by 2022.
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