Bitcoin miners see blended successes in tackling debt-fueled overexpansion disaster

In response to a latest report by Hash Charge Index, publicly-listed Bitcoin (BTC) miners took on greater than $4 billion value of debt through the run-up to the crypto bull market. Mesmerized by rising costs, trade rushed hand over fist to buy Bitcoin application-specific built-in circuits miners on simple credit score. 

Nevertheless, in at the moment’s context of Bitcoin value collapse, skyrocketing electrical energy costs, decrease market costs for mining rigs, and record-level mining problem, 2022 turned a particularly troublesome yr for sector gamers. That mentioned, some are holding on higher than others.

High 10 publicly-traded Bitcoin miners by liabilities | Supply: Hashrate Index

On Jan 3, Bitfarms introduced that the corporate bought 1,755 BTC throughout Dec. 2022 for whole proceeds of $29.9 million. The agency then used this quantity to pay down $16.5 million in its BTC-backed facility, together with $2.0 million in equipment-related indebtedness. 

Bitfarms additionally managed to renegotiate miner buying agreements resulting in extinguishing $45.4 million with out penalty whereas establishing a $22.4 million credit score for pre-paid pre-paid deposits to be utilized towards future buy agreements. The corporate mined 5,167 BTC ($86.1 million on the time of publication) for all of 2022 and had an excellent debt steadiness of $47.0 million on the yr’s finish.

The identical day, Stronghold Digital Mining introduced that it reached an alternate settlement to transform $17.9 million of its debt into most popular inventory bearing a face worth of $23.1 million. The popular inventory would bear no curiosity nor dividends, and would, in flip, be convertible into frequent inventory (with negligible par worth) at a conversion value of $0.40 per share, which is close to the inventory’s market worth of $0.44 on the time of publication. 

Others weren’t as lucky. Cointelegraph beforehand reported on Dec 21 that Greenidge signed a $74 million debt restructuring settlement with creditor NYDIG. The deal, if executed, would supply credit score reduction at the price of restructuring the corporate from an impartial Bitcoin miner right into a internet hosting web site for NYDIG’s Bitcoin mining rigs. Equally, Core Scientific, one of many largest gamers within the sector, managed to safe a $37.4 million mortgage however however is present process chapter. 

Not all Bitcoin miners launched into credit-fueled growth methods. On Jan 3., Digihost introduced that it elevated BTC manufacturing by 60% yr over yr. The corporate mentioned it has no debt apart from a vendor-take-back mortgage on its Alabama facility within the quantity of $934,500. Cointelegraph additionally beforehand reported on Dec 21 that German Bitcoin miner Northern Knowledge mentioned the corporate had no monetary debt whereas anticipating $204 million in income for 2022.