Bitcoin mining concerns have reported huge losses in the past quarter due to the collapse of cryptocurrency prices. Some are selling their coin holdings and mining rigs and even taking out loans to pay for operational expenses and stay afloat.
According to a Bloomberg report, the three biggest Bitcoin mining companies traded on the US stock market lost over $1 billion in the second quarter. The firms had to write down the value of their holdings due to the massive drop in cryptocurrency prices in the past months.
Bitcoin’s value dropped by almost 60 percent in the three months ending on June 30, from around $45,000 to under $20,000. Other cryptocurrencies dipped even more in price, with GPU-mineable Ethereum losing two-thirds of its value in the same period.
Core Scientific, Marathon Digital Holdings, and Riot Blockchain reported net losses of $862 million, $192 million, and $366 million, respectively, in the last quarter. Other crypto-mining companies, such as Bitfarms and Greenidge Generation Holdings, also took impairment charges.
Miners are selling Bitcoin holdings at a higher rate than they are producing new ones. June saw the highest Bitcoin offloading this year, with top public miners selling 14,600 coins but producing only 3,900. In June, Core Scientific may have sold almost 80 percent of its holdings to cover operational costs and fund expansion, while Bitfarms sold nearly half its coins. The trend seems to continue into the third quarter, as July was the second highest selling month, with 6,200 coins sold.
The companies are also selling their mining rigs and taking out loans in an attempt to stay afloat. Marathon Digital allegedly received an additional $100 million term loan and sold off mining rigs to raise a further $58 million. Meanwhile, Core Scientific is going for a $100 million common stock purchase deal with a private equity firm.
Miners weren’t the only ones in the crypto industry that registered massive losses in the second quarter. Coinbase, the largest cryptocurrency exchange in the US by trading volume, lost approximately $1.1 billion. The company laid off over 1,000 employees in June, while its CEO mentioned we might be looking at an extended crypto winter.