A single crypto regulator to appear in the EU Hotels in Maldives and Thailand accept crypto payments PayPal added bitcoin support to its mobile app Corporations invested more than $6 billion in crypto industry in the last 10 months DeFi-platform Velodrome accuses crypto sleuth of stealing $350k S&P Global dropped Coinbase rating to a speculative level BitGo will seek $100 million for Galaxy Digital refusal to acquire crypto platform Brazilian crypto exchange blocked customer accounts and fired staff Celsius Network’s debts is more his assets for $2,8 billion

Bloomberg: miners' loans could crash the crypto market again

Bloomberg: miners' loans could crash the crypto market again

Major mining companies have started facing difficulties in paying back loans secured against equipment totaling up to $4 billion. This poses a potential risk to major cryptocurrency lenders.

As reported by Bloomberg, given the crypto market's volatility, traditional loans for hardware modernization are hard to access and have high-interest rates. In order to fill the empty niche, such lenders as Galaxy Digital, NYDIG, BlockFi Inc., Celsius Network Ltd., Foundry Networks LLC, and Babel Finance started accepting mining equipment as collateral in addition to payments.

Now, collateral for such loans has proven to be insufficient since the equipment has become cheaper, said Ethan Vera, co-founder of the Luxor Technologies mining company. Vera estimates that equipment-backed loans are worth as much as $4 billion.

The article's authors report that the sale of Bitcoin holdings pressures prices and hardware prices could fall even lower if lenders themselves start selling the devices they hold as collateral. According to Luxor Technologies Corp., the value of the Bitmain S19 miner is down about 47 percent, compared to a high of about $10,000 in November.

Core Scientific Inc. already sold more than 2,000 bitcoins in May so it could pay off operating expenses, while Bitfarms Ltd. liquidated nearly half of its mined tokens to pay off part of a loan to Galaxy Digital Holdings Ltd. The company also has another loan secured by equipment from New York Digital Investment Group LLC.

Subscribe to our Telegram channel for the most relevant, interesting, and informative news from the crypto industry.

Is there an error in the article?
To report