Crypto Mining Giant Bitfarms Sells 3,000 BTC And Adjusts Its HODL Strategy

Please fol­low and like us:
Pin Share

On June 21, Bit­farms, an Argen­tinean cryp­tocur­ren­cy min­ing com­pa­ny oper­at­ing in Cana­da, announced an adjust­ment to its HODL strat­e­gy so as to improve the company’s liquidity.

Accord­ing to a press release, the com­pa­ny sold a total of 3,000 Bit­coin (BTC) over the last week for approx­i­mate­ly US$63 mil­lion to improve its cor­po­rate liq­uid­i­ty by near­ly US$100 million.

In this way, the company’s Bit­coin reserves were reduced from around 6,349 BTC to a total of 3,349 BTC, count­ing the dai­ly pro­duc­tion of what they car­ried dur­ing June. Through this sale, the com­pa­ny was left with much low­er BTC reserves than it had at the begin­ning of the year, which was 4,300 BTC.

It’s Hard To Deal With a Volatile Market

Accord­ing to the company’s data, Bit­farms can pro­duce an aver­age of 14 BTC per day, obtain­ing near­ly 1,260 BTC quar­ter­ly. There­fore, they can afford to sell at a loss, giv­en that the com­pa­ny bought 1,000 BTC for $43.2 mil­lion at the begin­ning of Jan­u­ary. This same amount of Bit­coin could be pur­chased right now at less than half the price or near $20.6 million.

How­ev­er, Bit­farms CFO Jeff Lucas said that due to the volatil­i­ty of the cryp­tomar­ket, the com­pa­ny had to sell its hold­ings, among oth­er fac­tors, to decrease its debt owed to Galaxy Dig­i­tal LLC (Galaxy) from $66 mil­lion to $38 million.

“Giv­en the extreme­ly volatile mar­kets, we have con­tin­ued to take steps to improve liq­uid­i­ty and to delever­age and strength­en our bal­ance sheet. Specif­i­cal­ly, we have sold 1,500 more Bit­coin and are no longer HODLing our entire dai­ly BTC production.”

Bitfarms Had to Sell Its Bitcoins at a Loss to Capitalize

Lucas indi­cat­ed that although they remain bull­ish on Bitcoin’s long-term price, they must focus on the company’s top pri­or­i­ties of main­tain­ing their posi­tion as a world-class min­ing oper­a­tor while con­tin­u­ing to expand their business.

“We believe that sell­ing a por­tion of our BTC hold­ings and dai­ly pro­duc­tion as a source of liq­uid­i­ty is the best and least expen­sive method in the cur­rent mar­ket environment.”

Bit­farms has 7 indus­tri­al-scale facil­i­ties in Que­bec, Wash­ing­ton, and Paraguay, 99% pow­ered by hydro­elec­tric ener­gy and secured by long-term ener­gy contracts.

There­fore, despite the finan­cial prob­lems it is fac­ing, like most large cryp­to com­pa­nies that have had to cut down their staff and expens­es, it should be not­ed that, should the mar­ket con­di­tions change, Bit­farms would sin­gle-hand­ed­ly return to being one of the high­est yield­ing min­ing com­pa­nies, thanks to its dai­ly pro­duc­tion of new BTC.

SPECIAL OFFER (Spon­sored)

Binance Free $100 (Exclu­sive): Use this link to reg­is­ter and receive $100 free and 10% off fees on Binance Futures first month (terms).

PrimeXBT Spe­cial Offer: Use this link to reg­is­ter & enter POTATO50 code to receive up to $7,000 on your deposits.

Source link

Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published.