Bitcoin mining consolidation, more insolvencies, say analysts say

Bitcoin mining consolidation, more insolvencies, say analysts say

A number of Bitcoin miners will announce the results of the third quarter in the coming days, since several companies in the mining sector have to deal with financial pressure.

Marathon Digital, Fortress Digital Mining and Hütte 8 Mining are among the companies in the industry that will have profit talks this week.

While analysts do not necessarily expect great announcements of bankruptcies or takeover during the upcoming calls to the industry players, you will pay attention to how the mining executives want to control the current environment.

"I always listen to information on expectations - company -specific and industry -specific - and to the steps of certain companies to meet your expectations," Kevin Dede, Senior Technology Analyst at HC Wainwright & Co.

Industry observers announced Blockworks at the beginning of this month that the miners' consolidation was imminent because some of the larger miners in the room could try to buy struck companies and their assets.

But Lucas Pipes, Managing Director at B. Riley Securities, said Miner in a solid financial situation would probably still wait.

"You want to make sure that you are all secured and supported, and build these treasure chest as far as possible," he said. "Are there exceptions to this rule? Yes, maybe."

Bitcoin mining rigs to keep running during the crypto winter

core scientific reveals in Submissions It complied with insolvency, and ARGO Blockchain then said that a potential Capital injection of $ 27 million, from which it had expected, failed.

"Space is desperate," said Pipes. "You can't express it differently."

dede added that the miners were forced to extinguish assets because it would be more difficult to obtain money in public markets.

Core Scientific said on Monday that there were 2,285 bitcoins at an average price of $ 19,639, as the proceeds were running to around $ 45 million. The company held 62 BTC on October 31 and about $ 32 million in cash.

Core Scientific and Argo Blockchain have not yet announced any results.

Iris Energy is also in a financial emergency. The Bitcoin-Miner, based in Australia, said last week in a SEC registration that he could achieve a monthly gross profit of $ 2 million by reducing Bitcoin, while the monthly capital and interest repayments on his debts are $ 7 million

BOM Shin, Vice President for Corporate Finance at Iris Energy, said Blockworks last week that the company's debt in a number of special purposes (SPVS) is structured, the market value of which is about 35 % below the outstanding main loans at the end of September.

The company is in ongoing discussions with its unauthorized lender, added Shin.

Iris Energy said that if it was unable to restructure the loans, two of its SPVs would have to put the loans in default, which would probably lead to the lenders forced to pay for the mining rigs, according to a research note from Compass Point from November 3. Research and Research analyst Chase White and Joe Flynn.

The analysts added that Iris Energy's share price had fallen according to the news - and that the company may find it difficult to receive equipment -supported financing in the future - but they believe that the company will be in a better financial situation after negotiations.

"We believe that the market misunderstands the effects of the situation, which we consider to be potentially significantly positive [Iris] This way, it can continue to work without the load of expensive debts," said White and Flynn.

In addition to the latest fights in space, the operator of the crypto mining data center Compute North reported bankruptcy in September.

dede said that he is expecting a little more pressure before further bankruptcies and consolidations.

"I think you can expect to see suffering for a while," he added. "I am unable to say how long this bear market will last, but the people who lead these companies should prepare to endure a long one."

The potential buyers of the area could wait with the purchase

Marathon Digital recorded a net loss of $ 192 million in the second quarter and is expected to announce its profits for the third quarter on Tuesday at 4:30 p.m. ET.

The company said on November 2 that it added about 32,000 miners last month to increase its hashrate to about 7 exahashes per second (EH/S). It also produced a record of 615 bitcoins in October and increased its total stock to 11,285 Btc.

Marathon wants to reach about 13 EH/s and 23 EH/s by mid-2023, Marathon CEO Fred Thiel told Blockworks.

Thiel said last month that marathon would keep an eye on cheap assets from fighting miners. He noted that the company could consider buying a hosting site, for example, if such a purchase would be strategically useful.

riot Blockchain is another company that has expressed interest in takeovers because CEO Jason Les described his company as one of the “best positioned buyers” of the segment.

The company produced 509 Bitcoins in October and held 6,825 BTC on October 31. It strives to reach 12.5 eh/s in the first quarter of 2023. Riot has scheduled a special assembly of shareholders for November 17th.

Frank Holmes, CEO of Hive Blockchain Technologies, said Blockworks in September that his company would check the purchase of equipment and possibly mining companies in the next six months.

Claanspark announced on November 1 that there were 3,843 units of the Bitcoin mining machines Antminer S19J Pro for $ 5.9 million. The machines seemed to come from Argo Blockchain, the reported that they had sold the same number of S19J Pro units last week.

pipes said, although he believes that "we approach ourselves" further mergers and took over in this area, there are often relatively few operative synergies that can be used.

He added that Riot is probably in the best financial situation of all miners, while Marathon is also able to use opportunities. But, he noted, these companies should perhaps concentrate on their ambitious Hashrate goals.

"I think the most important thing - implement the existing growth plan before taking valuable capital to add more growth that may not be as attractive as you have planned anyway," said Pipes.

other miners that should be kept in mind

After the call for the results of Marathon on Tuesday, Stronghold Mining and Hütte 8 Mining are planned to organize your own on Wednesday at 5:00 p.m. ET and on Thursday at 10:00 a.m.

The Miner Bitfarms based in Canada will publish its results of the third quarter on November 14th at 11:00 a.m.

Stronghold said last week that all outstanding capital sums-a total of around $ 67 million-had eliminated with Nydig and The Provid Bank as part of his equipment financing agreements.

Greg Beard, CEO of Stronghold, said in a statement that the company quickly ingrained at its balance sheet and improve liquidity in order to pursue take over Bitcoin miners at attractive prices. Stronghold had around $ 30 million of liquidity in cash and Bitcoin on November 1st.

meanwhile hut 8 mining produced 299 bitcoins in October to increase its stocks to a total of 8,687 BTC. The installed Hashrate capacity was 3.07 EH/S.

Jaime Leverton, CEO of Hut 8, said during the Digital Asset Summit from Blockworks in September that acquisitions in the current market environment were not necessarily the best because the company can buy new machines at attractive prices.

Bitfarms, which used Bitcoin's sale at the beginning of this year, dismantled 486 BTC in October and sold everything.

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The post-bitcoin mining consolidation, further bankruptcy awaited, say analysts, is not financial advice.