Bloomberg News reports that the three biggest publicly traded Bitcoin mining firms in the United States have lost $1 billion and more in the second quarter. This occurred after the companies took on a series of impairment charges triggered by the cryptocurrency price collapse.
Core Scientific Inc, Riot Blockchain Inc., and Marathon Digital Holdings posted net losses of $862 million, $366 million, and $192 million, respectively, in the quarter that ended on June 30th, as per the recent quarterly report revealed. On Monday, the other well-known miners, including Greenidge Generation Holdings Inc. and Bitfarms Ltd, reported results and were compelled to write down the holdings’ value in the wake of about a 60% crash in the cost of Bitcoin during the quarter.
In recent weeks, while the crypto mining companies’ shares are enjoying a respite of late, especially in recent weeks, they have found themselves in the deep red in the present year. The miners were forced to shift from positions of Bitcoin hoarding and dispose of off coins as they have been struggling for the repayment of debt and, in the recent quarter, cover up the operational costs. This trend was found to continue into the third quarter as well.
According to an analyst associated with Arcane Crypto, Jarand Mellerud, as described in a research note, there has been dumping of Bitcoin holdings at rates higher in comparison to the production rates by the public miners, and the phenomenon has continued. Also, as many as 6,200 coins were sold by the public miners in July, making the month the highest for selling BTC in 2022.
Bloomberg News also reports that the miners were not just the participants in the industry for taking significant hits in the last quarter. Coinbase Global Inc, the largest crypto exchange in the United States, has registered a loss of $1.1 billion, whereas MicroStrategy Inc. registered a net loss exceeding $1 billion.
The top public miners have been selling around 14,600 coins since June in comparison to the 3,900 that they produced, as stated by Mellerud. Core Scientific has sold about 80% of its stock of coins to meet the operational costs and for funding expansion plans in June. To repay a $100 million loan, Bitfarms has sold almost half of the holdings during the same month.
The miners are raising more debts and selling their mining rigs and holdings so they can remain afloat. Bloomberg News also reports that Marathon has added an extra $100 million term loan with Silvergate Capital Corp, which is crypto-friendly while refinancing the prevailing $100 million line of credit in July.
The US Securities and Exchange Commission has announced to the public companies with large Bitcoin holdings on their balance sheets that cannot disclose results while stripping out the price swings.
