Miner Bitfarms Sold Almost Half Its Bitcoin to Reduce Debt Bitcoin miner
Bitcoin Update
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Bitfarms (BITF) sold almost half its stash of the cryptocurrency in the past week for about $62 million to reduce debt as miners feel the squeeze of the crypto market downturn.Bitfarms is adjusting its "hold" strategy to "improve liquidity and strengthen its balance sheet," according to Tuesday's press release following an incorrect use of the word "hold." The sale of 3,000 BTC reduced the miner's holdings to 3,349, which includes month-to-date production. Bitfarms, based in Toronto, also closed a $37 million equipment-financing deal with NYDIG, announced last week, bringing liquidity to $100 million. The money raised in the sale helped the miner to reduce a bitcoin-backed credit facility from Galaxy Digital to $38 million.Last week, Bitfarms said it had sold 1,500 BTC to reduce rolling debt from $100 million to $66 million. The fall in the price of bitcoin has led to shrinking profit margins of miners – many miners borrow heavily to fund their operations. Asked about selling bitcoin to improve cash flow or minimize stock dilution, Chief Mining Officer Ben Gagnon said in an interview published on April 22 that Bitfarm's at-the-market offering and borrowing against its BTC holdings were alternative options. "We think that bitcoin is currently undervalued" and the long-term and medium-term potential of bitcoin "is significantly greater" than the cost of capital to borrow against the cryptocurrency, he said in April. At the time, BTC was almost twice as high as it is today. “While we remain optimistic on long-term BTC price appreciation, this strategic change enables us to focus on our top priorities of maintaining our world-class mining operations and continuing to grow.our business in anticipation of improved mining economics," Chief Financial Officer Jeff Lucas said in Tuesday's statement. Bitfarms shares rose 6.8% on Nasdaq.
Bitfarms is a company that owns and operates cryptocurrency mining farms. The company has been valued at $2 billion, based on its market capitalization. The company has sold half of its operating fleet of bitcoin miners, estimated to be worth nearly $450 million.