Following on the footsteps of Core Scientific, another BTC miner has identified default risks. Iris Energy, a bitcoin miner, has a $103 million debt payment due on November 8, after which the company may default.
Bitcoin price drop and growing energy expenses.
Core Scientific, a publicly traded Bitcoin miner, announced last week that it may file for bankruptcy very soon.
The Sydney-based green crypto miner is currently in debt. Iris Energy said in a statement on Wednesday, November 2, that part of its mining equipment isn't generating enough income to satisfy its debt-financing requirements.
The firm has borrowed $103 million against mining equipments. Iris Energy acquired this debt through a number of wholly-owned special-purpose vehicles. However, the Bitcoin miner is unwilling to provide any additional financial assistance or a refinancing deal for the vehicles. If this is the case, Iris Energy may fail to make its scheduled payment on November 8.
Over the last year, bitcoin miners have come under fire from all sides. Firstly , Bitcoin's 70% price drop from its all-time high caused miners to sell at lower profit margins. On the other hand, the cost of mining is rising in tandem with rising energy costs and Bitcoin hashrate.
On top of that, the Fed has decided to tighten monetary policy, which has resulted in higher loan rates. Profits have been squeezed from all sides, causing miners to massively dump their Bitcoin holdings. Core Scientific has sold about 1,500 BTC in the last month and now has only 24 BTC.
Iris Energy stated that they are now in restructuring talks with the lender regarding the special-purpose vehicles. In addition to establishing new vehicles, the firm stated that its goal was to achieve "prudent risk management to protect the underlying business and data centre infrastructure."
Iris Energy now has $53 million in cash in the bank. On Wednesday, November 2, Iris Energy's stock dropped 15%, closing at $2.88.
