SBF says FTX could acquire distressed BTC mining companies to prevent contagion fears

FTX CEO Sam Bankman-Fried is reportedly paying attention to the crypto mining industry, which may buy a needy mining company, Bloomberg News. report..

This was after FTX signed an option with BlockFi to expand its $ 400 million line of credit and buy the company for $ 240 million.

Stop the spread of transmission

The CEO, who provided credit support to the needy cryptocurrency through Alameda Research, said the cryptocurrency industry is playing a part in the spread of the infection.

According to Bankman-Fried:

“When we think of the mining industry, they play a small role in the spread of possible transmissions, as long as there are miners who have secured borrowing on their mining rigs. A truly fascinating opportunity for us. May come. I definitely don’t want to downplay that possibility. “

In particular, the CEO is reportedly looking for a cryptocurrency mining company that will have some sort of balance sheet impact on cryptocurrency lenders.

Cryptocurrency miners have “aggressively” expanded over the past two years against the backdrop of new high market rebounds, according to the report. But the bear market puts nearly $ 4 billion in loans backed by cryptocurrency mining equipment under stress.

This is because many of these machines have fallen by 50% since the market peaked in November 2021.

Cryptocurrency mining is no longer profitable

Since the beginning of the crypto winter, crypto mining companies have been adversely affected by the recession and many companies are selling their holdings. Despite the decline in mining activity, the energy costs of the mining industry continue to rise.

For example, to maintain profitability, Bitcoin (BTC) mining costs must be lower than the value of rewards and transaction fees. Otherwise, miners will lose more money than they earn.

As a result, the share of top mining companies has fallen by more than 75% this year, and analysts predict that many miners may find it difficult to survive the crypto winter.

Recently, Bitcoin mining company Compass Mining lost its facilities in Maine after a subcontractor claimed non-payment of electricity bills. However, the company argued that the claim was “totally wrong.”

Bitcoin sold nearly half of its BTC in late June to reduce debt and maintain liquidity. In April, Fred Thiel, CEO of US-based Marathon Digital Holdings, announced that his company is now available for sale at a reasonable price.