Skip to content Skip to sidebar Skip to footer
Bitfarms Ltd, a global Bitcoin self-mining firm based in Canada, revealed on Friday that it has engaged in an equipment financing agreement to help stabilize its finances as cryptocurrency prices fell.

Bitfarms has revealed plans to sell 1,500 BTC of its mined Bitcoins to reduce the size of a Bitcoin-backed credit facility it established with Galaxy Digital Holdings in December (GLXY). As a result, the company plans to lower the facility’s outstanding debt by one-third, bringing the US$100 million loan down to US$66.0 million.

Bitfarms is in talks with Mike Novogratz’s crypto merchant bank to extend the Galaxy facility, which was slated to expire on June 30. Bitfarms will use the $34 million raised from the sale of 1,500 Bitcoin to help pay off the loan. To raise $34 million, Bitcoins must be sold at a recent average price of around $22,000 per coin.

Apart from that, Bitfarms has signed a new $37 million equipment financing agreement with NYDIG at a 12% interest rate. The mining rigs at Bitfarms’ Leger and Bunker sites served as collateral for the transaction.

This means that the NYDIG equipment finance deal provides Bitfarms’ miners with non-dilutive money to help them grow in Quebec. To put it another way, the deal provides equipment financing at a rate of 12% per year, secured by Bitfarms at the company’s Leger and Bunker facilities and funded once the assets are installed and operating.

Bitfarms has received initial finance of US$37 million, and the miner is in talks with NYDIG for additional funding, which might come in July or October while work at the miner’s Bunker site progresses.

Profitability is down

Bitcoin’s price soared as high as $68,000 last year. Miners made up to 90% profit as a result of the change. As a result, several of them expanded their activities quickly and successfully started in 2022. On the other hand, Bitcoin mining has recently been less profitable as the price has fallen. Bitcoin’s price is currently trading at $20,573 at the time of writing, indicating a drop in cryptocurrency markets.

Some big mining companies, such as Riot, Marathon, and Core Scientific, have chosen to obtain funds through debt or equity markets or sell off some of their Bitcoin holdings rather than shut down their rigs to keep their businesses running.

Argo Blockchain has announced a proposal to seek financing and sell some of its Bitcoin to fund expenses. Core Scientific has already sold some of the Bitcoin it has mined this year and intends to do so in the future. However, most of these companies have changed their expansion plans cautiously after missing their optimistic sales forecasts.

Some miners have resorted to purchasing updated mining equipment to make mining more profitable. As a result, CleanSpark has placed an order for new Bitcoin mining machines.

Show CommentsClose Comments

Leave a comment

The leader in blockchain news, Cryptowatchlists is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Cryptowatchlists is an independent online newspaper, which concentrate in cryptocurrencies and blockchain startups.
Our Biggest Stories Delivered to Your Inbox