Recently exacerbated by the collapse of the крипто соода платформа FTX, the ongoing crisis in the cryptocurrency өнөр жайы has sent most of its participants into chaos, and it hasn’t spared Bitcoin (BTC) mining companies either, which are also pressured by other factors.
Indeed, bearish and sideways trading of nearly all crypto assets since January, paired with rising electricity costs, has started a domino effect of mining companies facing a profitability crisis or downright filing for bankruptcy, including several well-known names in the sector.
Түндүк эсептөө
The first domino to fall was Compute North, the second-largest Bitcoin тоо-кен казып алуу hosting provider in the United States, which 11-глава банкроттукка арыз берген in late September, followed by another court order requesting a bankruptcy sale to liquidate assets to cover its accumulated debt.
Toward fulfilling the obligations of up to $500 million, Compute North сатылган two of its assets to crypto mining and staking firm Foundry for $14 million. At the same time, Crusoe Energy сатып алган $1.55 million worth of assets. In early November, lender Generate Capital bought a stake in two of Compute North’s mining sites for $5 million.
Argo Blockchain
Октябрда, Argo Blockchain коомчулукка билдирди that a combination of factors had affected its profitability, stating that “the price of both natural gas and electricity caused by the geopolitical situation in Europe and low levels of natural gas storage in the United States.”
“These factors, coupled with the decline in the price of Bitcoin since March 2022 and the increased mining difficulty, have reduced the Company’s profitability and free cash flow generation.
Argo’s пресс-релиз from late October detailed its strategy to meet debt obligations and maximize liquidity, adding that “should Argo be unsuccessful in completing any further financing, Argo would become cash flow negative in the near term and would need to curtail or cease operations.”
Негизги илимий
Another casualty of the crypto crisis was Core Scientific, which indicated in its кварталдык отчет АКШнын Баалуу кагаздар жана биржалар комиссиясы менен (SEC) that it had accrued a net loss of $434.8 million over the third quarter of 2022, adding up to the $863 million it lost in the second quarter. Core Scientific also admitted it expected its existing cash resources to be “depleted by the end of 2022 or sooner.”
To add insult to injury, Core Scientific has also been slapped with a сотко арыз alleging it had failed to disclose a series of financial problems in its statements to shareholders during 2022. The now-bankrupt crypto lender Celsius дагы айыпталуучу the miner of refusing to meet its contract obligations.
Iris Energy
After failing to service a $108 million loan, Australian Bitcoin miner Iris Energy was forced to cut its BTC mining hardware it claimed was producing “insufficient cash flow” in a берүү to the SEC on November 21. This has reduced its mining power by approximately 3.6 EH/s (секундасына жаркылдайт).
In a strikingly similar situation to that of Core Scientific, the company is now facing the possibility of a класс иш-аракет in the U.S. over allegedly misleading its investors and misrepresenting its financial position in an initial public offering (IPO) from November 2021, during which it pooled $232 million in салымдар.
High energy costs meet falling crypto prices
Meanwhile, Bitcoin miner reserves have recently hit an 11-month low of 1,853,425 BTC, which suggests that BTC miners were capitulating, as белгиленген by leading crypto trading expert Ali Martinez in his tweet on November 24.
As outlined by Argo Blockchain, it wasn’t just the poor climate in the general crypto market that affected the operations and liquidity of major mining companies. боюнча to Bitfarms President Geoffrey Morphy, high energy costs have been another significant factor factoring in these miners’ demise.
Ичинде көрүнүш of Luxor Technologies’ head of content and Forbes senior contributor Colin Harper, the recent blow to Bitcoin’s price has further narrowed margins and deteriorated conditions for miners “in a year marred by crypto’s аюу базар and rising energy costs.”
As he added, this crisis “has the potential to drive companies that have survived thus far into bankruptcy,” the words колдоду in the comments by the executive chairman of Hive Blockchain Technologies, Frank Holmes, who believes that “there are still many more bankruptcies” to come.
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Source: https://finbold.com/bankruptcies-and-falling-profits-spell-doom-for-crypto-mining-industry/