Crypto Mining

SBF denies FTX is eyeing distressed crypto mining companies

— July 4, 2022 comments off

Sam Bankman-Fried, the founding father of crypto alternate FTX, has calmed hypothesis that the corporate is exploring acquisitions of distressed crypto mining companies, clarifying on Twitter on Saturday that they “aren’t actually wanting into the area.”

“Really undecided why the meme about FTX and mining companies is spreading, the precise quote was that we *aren’t* actually wanting into the area,” clarified Bankman-Fried on Twitter on Saturday.

Speculation that the corporate was looking out for mining corporations got here from an interview with Bloomberg on Friday, after the FTX founder stated he didn’t need to low cost the potential of a “compelling alternative” within the mining business, stating:

“There may come alongside a very compelling alternative for us — I undoubtedly don’t need to low cost that risk.”

However, the quote seems to have been taken out of context, forcing SBF to make clear that the agency is “not notably miners” however is “pleased to have conversations” with mining companies.

Bankman-Fried additionally said throughout the interview that crypto miners had no match into the corporate’s core technique and that he noticed no synergy from an acquisition standpoint:

“I don’t see any explicit causes that we have to have, you realize, an integration with a crypto miner.”

“From a strategic perspective, there’s no explicit apparent synergy essentially from an acquisition standpoint,” he added.

Mining loans beneath stress

Bankman-Fried was requested whether or not he was wanting into mining corporations amid a falling crypto market that has seen Bitcoin mining revenues fall sharply this 12 months.

At the identical time, the Russian invasion of Ukraine has additionally triggered vitality prices to skyrocket — inflicting a twin affect on miners, small and huge.

Mining profitability, which is a measure of every day {dollars} per terahashes per second, has reached lows not seen since October 2020, according to Bitinfocharts. At the time of writing, Bitcoin mining profitability is $0.0956 per day for 1Th/s, down 80% from the 2021 excessive of $0.464.

A report from Bloomberg on June 24 revealed that there have been as a lot as $4 billion in Bitcoin mining loans, with a rising quantity now underwater as Bitcoin and mining rig costs have fallen.

Related: Bitcoin miner Mawson to defer all main capital expenditures till market situations normalize

Last week, Cointelegraph reported that Bitcoin (BTC) mining income has been mirroring 12 months lows not seen since mid-2021, with Bitcoin mining income dipping to $14.40 million on June 17.

Data from Arcane Research in June discovered that the deteriorating profitability of mining has compelled public miners to begin liquidating their holdings. It revealed that a number of of those corporations bought 100% of their BTC manufacturing in May — more likely to cowl working prices and mortgage repayments.