Amid the Bitcoin price crash and rising energy costs this year, Bitcoin miners are having a very tough time. Last week, public-listed Bitcoin miner Core Scientific (NASDAQ: CORZ) announced chances of potential bankruptcy very soon. Now, another BTC miner Iris Energy (NASDAQ: IREN) is flagging risks of a potential default.
The Sydney-based green crypto miner is now in debt trouble. In a statement on Wednesday, November 2, Iris energy said that some of its mining equipment isn’t making enough cash to cover its debt-financing obligations.
The firm has acquired $103 million in debt against mining rigs. Iris energy acquired this debt via a few wholly-owned special-purpose vehicles. However, the Bitcoin miner is not willing to provide any further financial support or a refinancing agreement for the vehicles. If so, Iris Energy could default on its scheduled payment on November 8.
Bitcoin miners have been facing the heat from all ends over the last year. Firstly, Bitcoin’s 70% price correction from its all-time high forced miners to sell their holdings at lower profit margins. On the other hand, the cost of mining is growing with rising energy costs as well as rising Bitcoin hashrate.
On top of all this, the Fed has resolved to tighten monetary policy that has increased rates on loans. This squeeze of profits from all ends has led miners to sell off their Bitcoin holdings massively. Over the last month, Core Scientific sold close to 1,500 BTC and is now holding only 24 BTC.
Iris Energy said that they are currently having restructuring discussions with the lender for the special-purpose vehicles. It said that in addition to setting up new vehicles, the company’s goal was to achieve “prudent risk management to protect the underlying business and data center infrastructure”.
As of now, Iris Energy is currently holding $53 million cash in bank. On Wednesday, November 2, the Iris Energy stock (NASDAQ: IREN) collapsed 15% ending the trading at $2.88.
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