Bitfarms Ltd, a global self-mining bitcoin company based in Canada, announced on Friday that it had entered into an equipment financing agreement to stabilize its financial position amid falling cryptocurrency prices.
Bitfarms announced in December plans to sell 1,500 BTC mined to reduce the bitcoin-based credit facility it set up with Galaxy Digital Holdings (GLXY). The company plans to cut outstanding debt associated with the facility by one-third, reducing its $100 million loan to $66 million.
Since the Galaxy facility was due to expire on June 30, Bitfarms is currently negotiating a line renewal with crypto commercial bank Mike Novogratz. Raising $34 million by selling 1,500 Bitcoins will help Bitfarms partially repay its loan. Raising $34 million means that Bitcoin recently sold for an average of $22,000 per coin.
In addition, Bitfarms has signed a new equipment financing agreement of $37 million with NYDIG at an interest rate of 12%. Bitfarms secured loans by mining rigs at the company’s Leger and Bunker facilities.
This means the NYDIG Equipment Financing Agreement will provide undiluted financing to Bitfarms miners to support Quebec’s growth. This means that Bitfarms will provide equipment financing at an interest rate of 12% per annum secured by Bitfarms at the company’s Leger and Bunker facilities, and will be financed when the assets are installed and commissioned.
Bitfarms’ initial funding of $37 million was completed in consultation with NYDIG for additional funding, which could be made available in July and October as construction continues at the mining facility.
low profitability
Last year, the price of Bitcoin soared to $68,000. This move made miners profit by up to 90%. As a result, many have expanded their business at a rapid pace and have started 2022 with great fortune. However, recently, Bitcoin mining has become less profitable as the price of cryptocurrencies has plummeted. The cryptocurrency market is currently lower with Bitcoin trading at $20,573 at the time of writing.
Some major miners, such as Riot, Marathon and Core Scientific, do not favor closing their equipment and have decided to raise capital from debt or stock markets or sell some of their Bitcoin holdings to keep their trading operations running.
Argo Blockchain recently announced plans to sell some bitcoins to increase debt and cover expenses. Core Scientific has already sold some bitcoins mined this year and plans to continue selling them. Most of these companies missed their upward earnings estimates and conservatively revised their expansion plans.
Some miners have even bought new mining equipment to produce more bitcoins to increase their mining profits. A few days ago, CleanSpark ordered the purchase of new bitcoin mining equipment.
Bitfarms Ltd, a global self-mining bitcoin company based in Canada, announced on Friday that it had entered into an equipment financing agreement to stabilize its financial position amid falling cryptocurrency prices.
Bitfarms announced in December plans to sell 1,500 BTC mined to reduce the bitcoin-based credit facility it set up with Galaxy Digital Holdings (GLXY). The company plans to cut outstanding debt associated with the facility by one-third, reducing its $100 million loan to $66 million.
Since the Galaxy facility was due to expire on June 30, Bitfarms is currently negotiating a line renewal with crypto commercial bank Mike Novogratz. Raising $34 million by selling 1,500 Bitcoins will help Bitfarms partially repay its loan. Raising $34 million means that Bitcoin recently sold for an average of $22,000 per coin.
In addition, Bitfarms has signed a new equipment financing agreement of $37 million with NYDIG at an interest rate of 12%. Bitfarms secured loans by mining rigs at the company’s Leger and Bunker facilities.
This means the NYDIG Equipment Financing Agreement will provide undiluted financing to Bitfarms miners to support Quebec’s growth. This means that Bitfarms will provide equipment financing at an interest rate of 12% per annum secured by Bitfarms at the company’s Leger and Bunker facilities, and will be financed when the assets are installed and commissioned.
Bitfarms’ initial funding of $37 million was completed in consultation with NYDIG for additional funding, which could be made available in July and October as construction continues at the mining facility.
low profitability
Last year, the price of Bitcoin soared to $68,000. This move made miners profit by up to 90%. As a result, many have expanded their business at a rapid pace and have started 2022 with great fortune. However, recently, Bitcoin mining has become less profitable as the price of cryptocurrencies has plummeted. The cryptocurrency market is currently lower with Bitcoin trading at $20,573 at the time of writing.
Some major miners, such as Riot, Marathon and Core Scientific, do not favor closing their equipment and have decided to raise capital from debt or stock markets or sell some of their Bitcoin holdings to keep their trading operations running.
Argo Blockchain recently announced plans to sell some bitcoins to increase debt and cover expenses. Core Scientific has already sold some bitcoins mined this year and plans to continue selling them. Most of these companies missed their upward earnings estimates and conservatively revised their expansion plans.
Some miners have even bought new mining equipment to produce more bitcoins to increase their mining profits. A few days ago, CleanSpark ordered the purchase of new bitcoin mining equipment.
