THE DAILY ENCRYPT

September 25, 2022

The Bitcoin Miner Loan Upset – $4 Billion Repayments are Becoming Very Difficult

Some miners are finding it harder to repay loans backed by equipment that they have taken out due to Bitcoin's declining value, Bloomberg reported Friday....
purple and black pyramid wallpaper
Photo by Sandro Katalina

Some miners are finding it harder to repay loans backed by equipment that they have taken out due to Bitcoin’s declining value, Bloomberg reported Friday.

Analysts believe that a growing number of loans is underwater as the value of many mining rigs used as collateral by lenders has decreased along with Bitcoin’s price. Ethan Vera, the co-founder and CEO of Luxor Technologies in Seattle, estimates that there are as many as $4 billion worth of loans that are backed by machines.

Related Articles:  Web3 Security Firm Immunefi Raises $24 Million

Although few miners have defaulted, some have sold Bitcoin reserves which has put further pressure on the prices. Lenders may liquidate repossessed mining equipment to lower the cost of equipment.

Bloomberg reports that Bitcoin miners are, in general, feeling pain. Luka Jankovic is the head of lending at Galaxy Digital. “Machine prices have dropped and are still in price discovery mode. This is compounded with volatile energy prices and limited availability for rack space.”

Related Articles:  Jesse Powell - Crypto Exchange Kraken CEO to Step Down

Although some large mining companies still enjoy decent profit margins this could not be true for everyone. According to Wilfred Daye (chief executive officer at Securitize Capital), some miners’ total costs may be higher than $20,000, which would roughly reflect Bitcoin’s current price.

Vitalik Ivanov

Vitalik Ivanov

Vitalik is a speaker / journalist. He has spoken and given presentations at many blockchain events across the world. Vitalik is based in the UK, he loves to travel and calls Dubai his "crypto home". Vitalik has enjoyed speaking at blockchain events and has a main focus on CBDC's, NFT's and altcoins. Vitalik says "Everything, and i mean everything will be an NFT one day".
Vitalik Ivanov

Vitalik Ivanov

Vitalik is a speaker / journalist. He has spoken and given presentations at many blockchain events across the world. Vitalik is based in the UK, he loves to travel and calls Dubai his "crypto home". Vitalik has enjoyed speaking at blockchain events and has a main focus on CBDC's, NFT's and altcoins. Vitalik says "Everything, and i mean everything will be an NFT one day".

© 2022 The Daily Encrypt. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Latest News
PRESS RELEASES