The three largest bitcoin mining companies lost more than $1 billion last quarter
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The three largest bitcoin mining companies lost more than $1 billion last quarter, are selling mining rigs to stay afloat.
Bitcoin mining concerns have reported huge losses over the past quarter due to the slump in cryptocurrency prices.
Some are selling their holdings and mining rigs, and even taking out loans to cover operating expenses and make ends meet.
According to Bloomberg, the three largest bitcoin mining companies traded on the U.S. stock market lost more than $1 billion in the second quarter.
These companies have had to write down the value of their holdings due to the sharp drop in cryptocurrency prices over the past few months.
In the three months to June 30, Bitcoin’s value fell by nearly 60%, halving from around $45,000 to below $20,000.
Other cryptocurrencies have seen even bigger price drops, with GPU-minable Ethereum as a whole losing two-thirds of its value over the same period.
Core Scientific, Marathon Digital Holdings, and Riot Blockchain posted net losses of $862 million, $192 million, and $366 million, respectively, in the last quarter.
Other cryptocurrency mining companies, such as Bitfarms and Greenidge Generation Holdings, have written down their financial statements accordingly.
Miners are selling their cryptocurrency holdings much faster than they can produce new coins.
June saw the highest shipment of the year, with top public miners selling 14,600 coins but only producing 3,900.
In June, Core Scientific may have sold nearly 80% of its cryptocurrency holdings to cover operating costs and fund expansion, while Bitfarms sold nearly half of its cryptocurrency holdings.
This trend appears to continue into the third quarter, as July was the second-highest month for sales, with 6,200 units sold.
The companies are also selling their mining rigs and taking out loans to try to stay afloat.
Marathon Digital allegedly secured an additional $100 million term loan and sold its mining rigs to raise a further $58 million.
Meanwhile, Core Scientific is in the process of making a $100 million common equity purchase with a private equity firm.
Miners weren’t the only ones in the cryptocurrency industry to see huge losses in the second quarter.
Coinbase, the largest U.S. cryptocurrency exchange by trading volume, lost about $1.1 billion.
The company laid off more than 1,000 employees in June, and its CEO mentioned that we might see a long crypto winter.
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