Bankrupt Bitcoin Miner BlockFi Selling $160M Mining Rigs
The now-bankrupt crypto lender BlockFi has announced the sale of 68000 collateralized Bitcoin mining machines worth $160M. The bidding process was started last year and is expected to be closed on January 24 this year.
Impact of Unprecedented Crypto Market
The implosion of FTX left the crypto ecosystem bleeding, with the New Jersey-based BlockFi plunged into a liquidity crisis. Days later, BlockFi would later seek Chapter 11 bankruptcy protection. However, the firm restated it would prioritize restoring operations and returning customers’ frozen assets.
The struggle to remain afloat prompted BlockFi to sell Bitcoin mining machines worth $160M, initially acquired through a loan.
BlockFi Community said the bidding process started late last year and is set for closure on January 24.
Considering the current market condition, most Bitcoin mining machines will be under-collateralized due to price changes over the last few months. In a report issued in December 2022 by a Bitcoin mining expert Joe Burnett on Blockware Solution facility, he lamented the sharp decline in Bitcoin prices was exposing the miners to endless difficulties.
Currently, the prices of mining facilities have sustained the downtrend, dropping by 80% in a year. Also, the decrease in Bitcoin price and a surge in energy cost has created fierce competition for miners, plummeting the mining activities’ profitability.
Besides providing crypto lending activities, BlockFi was ranked among the best crypto miners outperforming other Bitcoin miners in the US.
Additionally, as stated by BlockFi director of risk management Yuri Munshkin, the Bitcoin miner has yet to acquire any new loan from last year.
Crypto Miners Battles Liquidity Crises
In 2022 crypto miners have struggled to cope with uncertainty in the crypto space. As a result, leading crypto miners such as Celsius Network announced selling part of their mining equipment.
As per the bankruptcy filing issued at Delaware Court, Celsius disclosed selling 2687 mining rigs to Touzi Investment, aiming at sustaining its operation in a turbulent crypto market.
Besides Celsius Network, Argo Blockchain sold its Bitcoin flagship center established in Texas to Galaxy Digital last year. Later, Core Scientific filed Chapter 11 of bankruptcy protection last December, citing a bearish crypto market.
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