Bitfarms sold 3K Bitcoin as part of its strategy to improve liquidity and pay off debt

by · July 6, 2022

Bitfarms sold 3K Bitcoin as part of its strategy to improve liquidity and pay off debt

The Canadian crypto mining company Bitfarms sold Bitcoin (BTC) worth approximately $ 62 million in June, and used the proceeds from the sale to reduce debt.

In a Tuesday announcement, Bitfarms said it had sold 3,000 Bitcoin over the past seven days, about 47% of the crypto mining company’s approximately 6,349 BTC holdings. According to the company, it will use the funds from the BTC sale – $ 62 million – to “rebalance the debt by reducing its BTC-supported credit facility with Galaxy Digital.” The crypto sold apparently included 1,500 BTC Bitfarms which was used to reduce the credit facility from $ 100 million to $ 66 million in June, bringing the debt down to $ 38 million at the time of publication.

According to Bitfarm’s CFO Jeff Lucas, the mining company “no longer holds” all the Bitcoin it produces daily – about 14 BTC – and instead chooses to “take action to improve liquidity and to reduce and strengthen” the company’s balance sheet. Bitfarms said it also signed a $ 37 million deal with NYDIG to fund equipment, bringing the company’s liquidity to about $ 100 million.

“While we remain positive on long-term BTC inflation, this strategic change enables us to focus on our top priorities to maintain our world-class mining operations and continue to grow our business in anticipation of improved mining economies,” said Lucas. “We believe that selling some of our BTC holdings and daily production as a source of liquidity is the best and least expensive method in today’s market environment.”

Bitfarms had reported 4,300 BTC from January, worth about $ 177 million when the cryptocurrency share had a price of more than $ 41,000. Founder and CEO Emiliano Grodzki said at the time that the company’s strategy was “to accumulate as much Bitcoin as possible at the lowest possible price and in the fastest possible time.”

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The move from Bitfarms came amid extreme price volatility among major cryptocurrencies, including BTC and Ether (ETH). On Saturday, the price of Bitcoin fell below $ 18,000 for the first time since December 2020, but has since returned to more than $ 21,000 at the time of publication. The ETH price experienced a similar fall to below $ 1,000 on Saturday – an 18-month low – before rising to more than $ 1,200 on Tuesday.