Despite the bleak market conditions for miners, Bitfarms (NASDAQ:) shares were able to post gains against the US Dollar.
Canada-based crypto miner Bitfarms closed its intraday position at $1.39. This change represents a 4.51% increase as conditions tighten for miners. Earlier this week, the company announced it would sell its long-held stash of around $62 million.
On Tuesday they said 3,000 in the past week Bitcoin to have sold. Of the previous 6,349 BTC holdings, this represents over 47% traded.
The crypto winter is taking a toll on crypto miners
The company said it must service outstanding debt by redeeming part of its BTC-backed credit facility with Galaxy Digital. Bitfarms added another 1,500 BTC from its earnings to pay off its debt. This reduced the initial deficit from $100 million to $66 million, which eventually fell to $38 million at the time of writing.
Bitfarms Chief Financial Officer (CFO), Jeff Lucas, announced that the company is adjusting its strategy in light of the crisis in the crypto market. He said they weren’t “hollowing” any of the daily earnings, which average around 14 BTC. The CFO added that the company is using these measures to service ongoing costs and strengthen its balance sheet.
“Since January 2021 we have been financing the operation and growth through various financing measures. We believe that selling a portion of our BTC holdings and daily production as a source of liquidity is the best and most cost-effective method in the current market environment,” Lucas said.
Bitfarms also announced a closed deal with NYDIG that will fund mining equipment and increase its total available liquidity to $100 million.
More miners are liquidating their BTC holdings
BitcoinTreasuries show that the current account balance of 3,075 BTC pushed Bitfarms ranking to 8th among listed companies. Other mining companies also suffered a similar fate. They appear to be in a desperate position, prompting them to touch their embossed reserve to stay afloat.
Public companies holding bitcoin. Source: BitcoinTreasuries
argon Blockchain (NASDAQ:), Riot (NASDAQ:), and Core Scientific sold 427, 250, and 2,598 coins, respectively. The first currently holds 2,317 BTC, while the second and third have 6,536 and 8,497 BTC in their reserves. These three companies have also fallen from their previous positions on the list of publicly traded companies.
Bitcoin holdings have plummeted as crypto market volatility increases. A report by Arcane Research shows that more and more miners are liquidating their treasures. The declining profitability of minting BTC has forced this sell-off among miners. More than 100% of May’s proceeds were sold, which equals about 4000 coins. That condition appears to have worsened in June as more firms join the selling spree.
Bitcoin will be sold by public miners in 2022
Source: Arcane Research
Additionally, there could be more pain for BTC as private miners could mimic the behavior of their peers in the industry. Also, miners often make up a decent chunk of bitcoin whales; According to CoinMetrics, they control about 800,000 Bitcoin.
Bitcoin price has been hovering around the $20,000 price level for the past week. This has thrown the market into a great deal of uncertainty as it represents a critical level of support for many investors. The groundbreaking cryptocurrency has over 70% of hers all-time high from $69,000 in November and could bleed further if current market sentiment holds.
Source: Crypto News Deutsch