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Crypto mining firms are starting to feel the heat as lower prices squeeze their profit margins. For instance, Bitcoin miner Bitfarms sold almost half of its BTC holdings to reduce its debt as part of its adjusted HODL strategy.
In a press release on June 21, Bitfarms said that sold a total of 3,000 Bitcoin (BTC) for around $62 million. The crypto mining firm then used part of the proceeds to partially pay off its debt to Galaxy Digital.
“Bitfarms has applied a portion of the proceeds to rebalance its indebtedness by reducing its BTC-backed credit facility with Galaxy Digital LLC (Galaxy) a further US$28 million from US$66 million to US$38 million,” the Bitcoin mining firm said.
With the sale of 3,000 BTCs, Bitfarms liquidated almost half of its Bitcoin stash. The sale is part of the company’s adjustments to its HODL strategy to strengthen its balance sheet.
The company revealed that it held cash of US$42 million and 3,349 BTC valued at approximately US$67 million at a BTC price of US$20,000 as of June 20, 2022. The miner also announced that it is in compliance with all its credit obligations.
“In consideration of extreme volatility in the markets, we have continued to take action to enhance liquidity and to de-leverage and strengthen our balance sheet,” Bitfarms Chief Financial Officer Jeff Lucas said. “Specifically, we sold 1,500 more Bitcoin and are no longer HODLing all our daily BTC production.”
Lucas explained that Bitfarsm remains bullish on Bitcoin’s long-term potential and expects the crypto’s price to eventually appreciate. However, its new strategy enables the company to continue to grow while maintaining its world-class mining operations amidst challenging market conditions.
“Since January 2021, we have been funding operations and growth through various financing measures,” the CFO added. “We believe that selling a portion of our BTC holdings and daily production as a source of liquidity is the best and least expensive method in the current market environment.”
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