In the wake of growing profitability of cryptocurrency mining, American miners took out loans to purchase equipment.
What is known
At a time when the profitability of miningcryptocurrencies reached 90%, the total amount of loans taken for the purchase of equipment reached $4 billion. After the bankruptcy of the FTX exchange, there was a shortage of liquidity in the market. Lenders in an attempt to return the lost are trying to confiscate mining equipment, but in recent months its value has fallen significantly. According to Bloomberg, 85%.
Iris Energy expects default on loans worth$108 million with limited recourse. This means that the creditor will have the right to rely solely on the sale of mining installations and will not be able to make additional demands on the debtor to pay off the entire amount of the debt.
NYDIG issued a loan this year aloneamounting to almost $71 million secured by 19,800 cryptocurrency mining installations. Stronghold Digital Mining returned more than 26,000 pieces of equipment at the end of the summer to pay off a debt of $67 million.
Now lenders have thousands of installations on handfor the extraction of cryptocurrencies, the value of which, as noted above, fell by 85%. Now they need to decide how to use the equipment to the maximum advantage. They can find data centers and start mining Bitcoin on their own, or they can sell installations at a big discount.
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