Amid the crypto market crash this year, Bitcoin miners have been on a huge selling spree to cover operational costs and repay their loans. Going further, Bitcoin miner Stronghold Digital Mining Inc. is now considering selling 26,200 of its mining rigs to reduce its debt significantly.
As per reports, Stronghold has reached an agreement with lenders like New York Digital Investment Group and WhiteHawk Capital. Selling these machines will help Stronghold eliminate all of the $67.4 million outstanding debt, said the company on Tuesday, August 16. This will help reduce near-term payments while adding $20 million in additional borrowing capacity for Stronghold.
Besides, the Bitcoin miner is also working on convertible note restructuring which will help in reducing the principal amount outstanding by $11.3 million. It will also help in reducing strike price substantially from $2.50 to 1 cent. Speaking to Bloomberg, CoinShares analyst Matthew Kimmell said:
“Liquidity is key for miners in a bear market. At current prices, miners are receiving less cash flow per Bitcoin sold compared to both last year and Q1 2022, while still potentially facing the same infrastructure, machine, and energy costs.”
Amid the crypto market crash, more than $4 billion worth of loans to Bitcoin miners have come under stress. Bitcoin miners have been forced to sell their previous holdings to meet their operational costs.
