This Bitcoin Miner is Selling 26,200 Rigs to Reduce Debt

Amid the crypto market crash this year, Bitcoin miners have been on a huge selling spree to cover operational costs and repay their loans. Going further, Bitcoin miner Stronghold Digital Mining Inc. is now considering selling 26,200 of its mining rigs to reduce its debt significantly.

As per reports, Stronghold has reached an agreement with lenders like New York Digital Investment Group and WhiteHawk Capital. Selling these machines will help Stronghold eliminate all of the $67.4 million outstanding debt, said the company on Tuesday, August 16. This will help reduce near-term payments while adding $20 million in additional borrowing capacity for Stronghold.

Besides, the Bitcoin miner is also working on convertible note restructuring which will help in reducing the principal amount outstanding by $11.3 million. It will also help in reducing strike price substantially from $2.50 to 1 cent. Speaking to Bloomberg, CoinShares analyst Matthew Kimmell said:

“Liquidity is key for miners in a bear market. At current prices, miners are receiving less cash flow per Bitcoin sold compared to both last year and Q1 2022, while still potentially facing the same infrastructure, machine, and energy costs.”

Amid the crypto market crash, more than $4 billion worth of loans to Bitcoin miners have come under stress. Bitcoin miners have been forced to sell their previous holdings to meet their operational costs.

Bitcoin Miners Faces Losses Upwards of $1 Billion

As per another Bloomberg report, Bitcoin miners incurred lossed more than $1 billion during the crypto market crash this year. Top three Bitcoin miners – Core Scientific, Maratho Digital, and Riot Blockchain incurred losses of losses of US$862 million, US$192 million and US$366 million respectively..

All of these three public listed companies have seen their stock prices plummeting severely this year. In a research note, Jarand Mellerud, an analyst at Arcane Crypto writes:

“Public miners are still dumping their Bitcoin holdings at a higher rate than their production rate. Public miners sold 6,200 coins in July, making July the second highest BTC selling month in 2022.”