New Deal – Bitcoin (BTC) miners are on the list of top victims of the crypto winter. The bear market is binding. This company had to decide to return its cars to one of its creditors in order to secure its cash flow.
BTC mining machines on the altar of debt
The company has postponed the publication of financial results for the second quarter of this year by seven days. The goal is to be able to complete negotiations. On the one hand, they will reduce current debt, while increasing creditworthiness.
According to a press release dated August 16, Bitcoin miner Stronghold has secured an agreement with the New York Digital Investment Group (NYDG). We are talking about the repayment, or rather writing off the debt in the amount of 67.4 million dollars.
To capitalize on the measure, which allows the company to cut just over 52% of the 127.9 million debt listed in its latest financial report, Stronghold will be returning 26,200 bitcoin mining machines to NYDG.
>> Bitcoin miners look grim. Find a smile by signing up for PrimeXBT (commercial link) <
Liquidity crisis: Stronghold restructures its finances
Miners would part with 15,000 BTC and 6,200 BTC in June and July. These volumes represent respectively 400% and 158% of their monthly production.
These figures from the Arcane Research report illustrate the difficult situation that Bitcoin miners are currently in. They must find liquidity at any cost. This is necessary to continue funding their operating expenses, although the markets are clearly in the red.
In order to have enough cash, Stronghold also negotiated a restructuring of its convertible bonds with creditor WhiteHawk Capital, as well as changing its warrants.
The measures to be taken in this context, combined with the $67.4 million debt cancellation to NYDG, will allow the bitcoin miner to reduce its current debt by 55%, or a total of $79 million in absolute terms. value.
Stronghold expects the deals to improve its “cash flow outlook” by about $40 million by the end of 2023.
In this way, Stronghold strengthens the financial strength of the company through these agreements. The company and the industry as a whole must find sustainable solutions to help them survive the crypto winter. It will probably continue. After – perhaps naive – hopes for a sustained bullish recovery from Bitcoin’s run above $25,000, markets should now consider a return below $20,000.
Falling prices also affect miners. Take advantage of the current market conditions to safely accumulate bitcoins. Register on the PrimeXBT platform to trade the king of cryptocurrencies (trading link).