About $4 billion in mining loans to be paid off

while the recent bear market It is very evident in the price of cryptocurrencies, this drop is worrying in sectors that are not very noteworthy. An example of this is how the crisis has hurt the mining sector, with miners selling their equipment and now placing increased pressure on payments of US$4 billion in loans from companies in the sector.

According to data obtained by Bloomberg, the recent downward trend in Bitcoin price is making it difficult for some miners to repay up to $4 billion in loans secured by their equipment, this shortfall and payment difficulties could pose a potential risk to major players. lenders.

According to reports, an increasing number of loans are in a “risk area”, with many miners and equipment accepted as collateral for these loans falling significantly in value, alongside of course the significant drop in cryptocurrencies price.

Only a few miners have defaulted on their loans so far, but recent sales are showing signs of difficulty with bigger players in this industry.

THE Nuclear Scientific sold more than 2,000 bitcoins in May to help cover operating expenses.

Meanwhile, the bit farms earlier this month sold nearly half of its mined bitcoins to repay part of its $100 million loan with Galaxy Digital Holdings Ltd, dumping more than 3,000 bitcoins into the market.

Yet she also took a collateral loan on her miners at New York Digital Investment Group LLC.

While the situation isn’t as serious for these bigger names, analysts say if things don’t improve, the effects of the mining crisis could be even more devastating in the future.

The sale of bitcoin reserves will put further pressure on prices and equipment costs could fall further if lenders, seeking to recoup their losses from defaulting on loans, liquidate the machines.

This can be felt in some cryptocurrency gear, with the value of Bitmain’s S19 mining rig, one of its top sellers, down about 47% from a high of about $10,000 in November, according to data from Luxor Technologies Corp. †

According to Luka Jankovi, Galaxy Digital’s head of lending, miners ‘going through a time of pain’

“A lot of operations started to have negative net revenues at these price levels.

Machine values ​​have plummeted and are still in price discovery mode, exacerbated by volatile energy prices and limited space and rack supply.”

The Bloomberg article states that miners who put their equipment as collateral thought they would be in a better place today, but the recent protracted slump has really derailed those plans and could pose more risks in the future if mining directly affected because it is now.