• Tue. May 28th, 2024

Report: ASIC Financing Loans Worsened the Liabilities Of BTC Miners Last Year

Phillip Seefeldt

ByPhillip Seefeldt

Feb 11, 2023

The year 2022 has been severe for Bitcoin miners. Especially in the case of high-interest loans to finance equipment, a lot of difficulties were faced by the BTC miners in 2022, as mentioned in a report that was recently published by Hashrate Index. The respective report disclosed that the platform evaluated the debt on the balance sheets of public and private miners.

BTC Miners Fell Deep in Debt in 2022, Says a Report

It revealed that the worth of debt taken for financing the ASIC miners is ranged between $2B and $4B, as per the estimate made by the platform. As per the analysis, six ASIC financing contracts were carried out back in 2020.

The worth of the respective contracts was nearly $47.84M. On the other hand, twenty-six contracts were accomplished a year after in 2021, and $662.25M was the worth of the respective contracts.

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An increasing sum of equipment financing entities has jumped into the industry since 2020. This resulted in an interest proportion of nearly 10.46% on average in the previous year. This was approximately 12.77% lower than in 2020 and 12.82% lower than in 2021. Eventually, additional contracts were witnessed in 2022’s 1st half. The year witnessed nearly eighteen contracts.

These contracts had a cumulative worth of up to $641.80M. Sixteen of these contracts (equaling $576.80M worth) were carried out in 2022’s 1st half. Nonetheless, the scenario of the crypto market faced a downfall in terms of ASIC contracts. Many of the miners defaulted on their respective loans. This was so as the revenue of the miners fell significantly.

The study indicated that their total of identified defaults in the case of public miners accounted for nearly $227.4M as the lowest value while $238.4M as the highest worth.

ASICs collateralized several of the respective loans. Therefore, in the default events, several of the companies winded up with the entities playing the role of their financiers. As per the statistics, the firms involved in BTC mining have liabilities equaling $4B worth.

The top company in this list is considered to be Core Scientific. The rate of bankruptcies and defaults around the mining space was astonishing. Apart from the market condition, miners were additionally compelled to confront the issues like enormous electricity charges as well as the ever-increasing mining difficulty. Because of this, the daily revenue of the miners plunged vertically.

On the 31st of December, this figure dropped to almost $16.38M. Previously, the respective revenue’s amount was considerably high at $63.548M back on the 10th of November. As the debt burden is consistently increasing on the miners, a few of the mining companies started selling their assets. A prominent name in this respect is Compute North.

In this respect, Compute North distributed its data centers among the creditors following submitting a bankruptcy filing. After that came Argo Blockchain. This platform was compelled to sell its mining service Helios which was situated in Texas. The company carried out the sale for nearly $65M. The entity to which the mining facility was sold was Galaxy Digital.

A Few Bitcoin Miners Still Have Faith in Bitcoin Mining

Argo Blockchain additionally obtained a loan of nearly $35 million. Nevertheless, the present situation additionally offers an opportunity for those who are willing.

Those who have the potential to carry out asset investment or can elevate the margins thereof by innovating still have a chance. For example, Northern Data, a Bitcoin miner based in Germany, intends to invest in BTC mining amid the present market scenario.

Phillip Seefeldt

Phillip Seefeldt

Phillip Seefeldt is a skilled and perceptive news writer known for his comprehensive analysis and engaging writing style. With a commitment to accuracy and a deep understanding of current affairs, his articles provide readers with insightful perspectives and thought-provoking insights.

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