Bitfarms, a Nasdaq-listed Bitcoin mining business, has announced the sale of around 3,000 BTC (about $62 million), making it the third mining firm to declare the selling of mined bitcoins in the aftermath of unfavorable market circumstances.
Bitfarms had previously followed a rigorous holding policy, retaining all bitcoins generated by its mining activities. The current market downturn, however, has compelled the corporation to reconsider its approach.
The proceeds from the BTC sale were notably used to pay off a $37 million debt that the business had incurred with the Bitcoin loan agency, NYDIG, in order to buy additional mining equipment. Bitfarms also paid off a $66 million loan from Genesis Digital, reducing its debt to $38 million.
According to Bitfarms, these steps improved company liquidity to $100 million and offered a bigger cushion against unfavorable market circumstances. Bitfarms CFO Jeff Lucas said that, in addition to the previously announced sale, the business would now market sell parts of BTC acquired through mining activities.
He said that the firm has investigated numerous funding options since last year, but that selling BTC at this time is the greatest source of cash. In today’s announcement, Lucas said,
“In the present market climate, we feel that selling a percentage of our BTC holdings and daily output as a source of liquidity is the best and least costly approach.”
Reduced mining profitability and higher sales from miners have both contributed significantly to Bitcoin’s recent price fall. Several mining businesses, including Core Scientific, Argo Blockchain, and Riot Blockchain, sold BTC in May, adding to the selling pressure.
Although Bitcoin has recovered beyond the psychological $20k threshold at the time of writing, it is still more than 60% behind its all-time high. Price-induced miner selling, commonly known as miner capitulation, will most certainly need to abate in the coming weeks for BTC to launch a more robust rebound.