Will a new loan pool for crypto-miner borrowers attract?

Will a new loan pool for crypto-miner borrowers attract?

Bitcoin-Miner on the hunt for capital have a new option-but it remains to be seen whether the conditions for borrowers will be attractive.

Institutions that want to grant Bitcoin miners loans can now earn between 15 % and 20 % annually via a loan pool introduced by Icebreaker Finance over the Maple Finance defi credit market, the companies said on Tuesday.

Earlier Maple pools-which aim at different risk profiles and shorter terms-give loans to interest rates between 8 % and 12 %, Sid Powell, CEO from Maple Finance, told Blockworks. The higher interest rates reflect the latest credit contraction, long -term loans and the overall risk in mining.

The loans in the pool-with an initial capacity of $ 300 million-have a term of 12 to 18 months and are secured by assets such as mining systems, performance transformers and digital assets.

The setup is aimed at institutional credit investors and capital allocators as lenders, including wealthy private individuals, digital asset funds and traditional credit funds.

"We find that this type of investors are attracted to the strong risk -over -cleaned returns of a system that is still considered rather esoteric," said Powell.

Maple has awarded almost $ 1.8 billion of loans since the introduction of his first pool in May 2021. The crypto investment company Maven 11 launched an institutional loan pool of $ 40 million in the past month via Maple.

a good option for miners?

The intended borrowers are medium-sized Bitcoin mining and digital-asset infrastructure companies in North America, Canada and Australia that have "effective treasury management and prudent energy strategies", said Maple in an explanation.

"We assume that this will be attractive for public and private blue chip creditors, since their excellent operational efficiency and low leverage enable them to use border capital in an attractive way-be it when adding capacity or reducing the volatility of the income by additional collecting power contracts," said Glyn Jones, CEO from ICEBREAKER Finance, opposite block works.

But according to the Chase White, a leading research and political analyst for Compass Point Research and Trading, the conditions for miners seem to be "quite arduous".

"I think the type of miner who would accept this offer is more of a miner who needs capital to keep the ship over water at all costs, which is not what the pool seems to be looking for," said White to block works.

interest rates of 15 % to 20 % in monthly repayment payments are at the top of similar agreements at the top, White added.

Argo Blockchain, for example, signed an equipment-supported financing agreement with Nydig in May in May, which will be due to an interest rate of 12 % in 24 months.

" If a miner is already scaled and a large amount of [Bitcoin] in its balance sheet in such a way that it only uses debts to finance future growth and has enough ongoing income to pay monthly capital and interest payments, I think that it would be able to achieve a lower interest rate and a longer amortization time," said, "said White.

Matthew Sigel, Head of Digital Assets Research near Vaneck, but said that access to capital for Miner was restricted in view of the market deposition.

"The public share capital markets are largely closed Bitcoin miners, so we assume that decentralized pools like Maple are somewhat well received despite the high interest rates of miners who want to make it until the next halving," said Sigel.

Some miners who need cash have recently started selling their stocks or using Bitcoin as security for loans

hut 8 mining CEO Jaime Leverton said during a panel at the Digital Asset Summit from Blockworks that you expect more companies to use BTC stacks in the future.

"The markets for infrastructure -supported bonds have become very, very tight and the interest has become very high, so we certainly saw less activity in this area for infrastructure debt," she added. "From the perspective of the stock markets, we really see [AT-the-Market Offerings] to be the vehicle of the choice for miners who have this option."

hive blockchain technology closed a at-the-market-shares agreement to sell company shares worth up to 100 million US dollar, to sell its To expand Bitcoin mining capacities.

The CEO of Hive, Frank Holmes, said Blockworks last week that the company did so to benefit from potential large purchase opportunities on the declining market.

. .

The Post will a new loan pool for crypto-miner borrowers attract? is not a financial advice.