Following the bear market, several crypto mining companies are being forced to dump a substantial amount of self-mined Bitcoin to cover operating costs. The latest of them, Core Scientific, recently disclosed that it sold more than 7,000 BTC last month, and it will continue to liquidate its Bitcoin holdings to meet expenses.
Core Scientific sold 7,202 BTC
According to the report, the US crypto mining firm realized total proceeds of $167 million from selling 7,202 BTC at $23,000 on average during the past month. The funds were primarily deployed to cover “payments for ASIC servers, capital investments in additional data center capacity and scheduled repayment of debt.”
We are working to strengthen our balance sheet and enhance liquidity to meet this challenging environment, and continue to believe that we will be operating in excess of 30 EH/s in our data centers by year end 2022.Mike Levitt, Core Scientific Chief Executive Officer.
In June, Core Scientific operated approximately 103,000 self-mining ASIC servers, producing 10.3 EH/s. It will continue to sell self-mined bitcoins to cover operating expenses, fund growth, retire debt and maintain liquidity.
The company had 1,959 bitcoins and about $132 million in cash as of June 30th.
Pressure on mining firms
Bitcoin is currently down by 35% over the last 30 days, and that is subjecting many miners under the pressure of dumping a substantial amount of coins into the market, so as to raise enough funds (in USD) to fund operations and maintain growth. Basically, mining firms tend to be more like sellers during market downturns, which isn’t good for prices.
Another popular crypto mining company, Bitfarms, also sold 3,000 BTC for about $62 million in June. The coins were sold as part of the company’s strategy to improve liquidity and meet debts.
Judging by the current Bitcoin price, it’s safe to say that BTC mining is becoming less profitable, especially for miners with older generation equipment. Several mining rigs have now reached shutdown prices, including Antminer S11 and Avalon A9.