Bitcoin: The cost of maintaining this firm’s HODL strategy? 3K BTCs…
Canadian cryptocurrency mining business Bitfarms has sold more than $62 million in Bitcoin in June, using the proceeds to settle its debt. About 3,000 Bitcoins, or roughly 47% of Bitfarms’ total holdings of about 6,349 BTC, have been sold in the preceding seven days, according to a statement released on Tuesday.
According to the company, it will “rebalance its liabilities by lowering its BTC-backed credit facility with Galaxy Digital,” with the $62 million from BTC sales. As of the time of writing, Bitfarms’ debt was $38 million after using the cryptocurrency it sold in June to reduce its credit facility from $100 million to $66 million.
It seems that 1,500 of these BTC were included in the cryptocurrency sold.
The decision taken by Bitfarms coincided with severe price volatility seen by popular cryptocurrencies like Bitcoin and Ether. The price of Bitcoin fell below $20,000 for the first time since December 2020, although it has since risen to more than $21,000, as of the time of writing.
The statistics provided by the company show that Bitfarms can generate an average of 14 BTC each day, or roughly 1,260 BTC per quarter. Given that the corporation purchased 1,000 BTC for $43.2 million at the beginning of January, they can thus afford to sell at a loss. At its current price, the same quantity of Bitcoin could be purchased for less than half the price.
However, according to Bitfarms CFO Jeff Lucas, the company had to liquidate its shares to reduce its debt to Galaxy Digital LLC from $66 million to $38 million. He said,
“Given the extremely volatile markets, we have continued to take steps to improve liquidity and to deleverage and strengthen our balance sheet. Specifically, we have sold 1,500 more Bitcoin and are no longer
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