Crypto Miner Bitfarms Sells 3000 BTC in Loan Repayment to Galaxy Digital

UTC by Bhushan Akolkar · 3 min read
Crypto Miner Bitfarms Sells 3000 BTC in Loan Repayment to Galaxy Digital
Photo: Depositphotos

The recent liquidation of 3000 BTC comes in order to pay back the $100 million loan to Galaxy Digital. Bitfarms said that the financial liquidity will help them in this period of macroeconomic crypto challenges.

Amid the massive price crash in Bitcoin (BTC), Canada-based crypto mining giant Bitfarms revises its Bitcoin holding policy. During last week’s market crash, Bitfarms sold 3000 Bitcoins for $62 million.

A lot of bitcoin miners worldwide have been selling their holdings to cover the operational costs. The recent liquidation will help Bitfarms to pay back its $100 million from Galaxy Digital. Apart from its 3000 BTC sale proceeds, Bitfarms will be securing an additional $37 million facility collateralized by mining machines.

With its recent sale, Bitfarms has almost given up all of the Bitcoins that it mined last year in 2021. However, despite this, Bitfarms CFO Jeff Lucas said that he continues to remain bullish on Bitcoin’s long-term price. Lucas added:

“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. While we remain bullish 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.”

Lucas further added that this is also the best and the least expensive strategy for Bitfarms considering the current environment. “In addition to lowering our interest expense, this $34 million reduction in borrowing gives us the ability to utilize more of our BTC holdings strategy as it frees up BTC that would otherwise be used to collateralize this credit facility,” he added.

Bitfarms had secured the loan from Galaxy Digital collateralized at 143% of the total amount borrowed. Whenever the value of collateral drops under 133%, Bitfarms will have to contribute additional collateral.

Bitfarms Bitcoin Holdings and More

By May 31, Bitfarms was holding a 6,075 BTC. After this recent sale, the total Bitcoin holdings by the company stand at 3,349 BTC. The additional difference comes from the June production as Bitfarms produced an average of 14 BTC per day.

As of the current Bitcoin price, Bitfarms’ Bitcoin holdings are worth $72 million. This is above 143% of the company’s total borrowings of $38 million. Recently, Bitfarms also closed a deal with NYDIG for a $37 million loan collateralized by mining machines. The Bitcoin mining giant might opt for additional financing this July or October.

Lucas said that the company is now in better shape financially to deal with current market conditions. “We have proactively taken non-dilutive strategic actions to increase our financial liquidity and flexibility during this period of macroeconomic crypto challenges,” said Lucas.

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