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The next cryptocurrency scene situation does not seem to be improving Collapse of FTX (opens in new tab)According to a report from . bloomberg (opens in new tab)bitcoin mining companies are unable to repay millions of dollars in loans and lenders are stuck with thousands of mining rigs.
Ethan Vera, COO of Luxor Technologies, told Bloomberg that as crypto mining boomed, miners would eventually dictate a lot of loan terms, using mining rigs purchased with loans as collateral. said to have provided So if I couldn’t pay off the loan, I would just give up the machine. Incidentally, its value has fallen by at least 85% since last month, according to the report. Oh.
Bloomberg, the cryptocurrency lending industry, estimates that mining equipment worth $4 billion was funded during its heyday. Profits skyrocketed as the price of Bitcoin rose and more loans were issued. coinshares (opens in new tab)told Bloomberg:
One of its largest lenders, the publicly traded NYDIG, will lose hundreds of millions of dollars as multiple borrowers, including Iris Energy, which secured a $108 million loan, are expected to default. Bankrupt BlockFi owes the company his $54 million debt. Another borrower, Stronghold Digital Mining, returned approximately 26,200 mining his rigs in August, and Bloomberg said it would clear his $67 million NYDIG debt.
Luxor Technologies, a cryptocurrency mining services company, told Bloomberg that private companies account for 75% of the computing power of the entire Bitcoin network. We also expect more defaults as private companies are not required to disclose their losses.
the value of bitcoin cornered (opens in new tab) Two recent incidents: Drama at FTX (opens in new tab)and its rival currency Ethereum, switched to Proof of Stake, The end of large-scale GPU mining (opens in new tab) in the last few months. 80% down since November 2021.
Ethan Vera, COO of Luxor Technologies, told Bloomberg that it would be more economical for many miners to walk away from these deals than to get along with lenders. I need a lender for the next 5 years. “
