The bankruptcy of Celsius may bring heavy selling pressure on Bitcoin miners! Only half of the 80,000 units remain in operation

While the insolvent cryptocurrency lending platform Celsius submitted its financial restructuring to the New York Bankruptcy Court on the 14th, its mining subsidiary Celsius Mining was also unable to escape the doom and filed for bankruptcy; because the company may be forced to sell related equipment due to liquidation needs in the future, it also Let the market worry that this will put further downward pressure on miner prices.

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According to the bankruptcy documents filed by Celsius, Celsius mining currently has 80,850 mining machines, of which 43,632 are in operation. Originally, the company expected to increase its mining equipment to about 120,000 rigs by the end of this year, making Celsius one of the largest miners in the industry. But industry watchers speculate that Celsius mining could be sold off to raise cash due to bankruptcy, and that the offloading of the mining platform could be troublesome.

CoinShares digital asset analyst Matthew Kimmell said: Celsius mining selling machines will add downward pressure on already falling machine prices.

One news that may corroborate analysts’ speculation is that, according to an earlier report by Coindesk, citing people familiar with the matter, Celsius mining auctioned off thousands of its newly purchased mining machines in June before officially declaring bankruptcy: the first batch of 6,000 miners. Taiwan) was sold at US$28/TH, and the second batch (5,000 units) changed hands at US$22/TH, which was significantly lower than the average market price at that time.

It remains unclear whether Celsius will sell out or continue its mining operations during the company’s restructuring process, but Kimmell said: “Celsius’ goal appears to be to continue at least part of Celsius Mining’s operations post-restructuring to generate bitcoin. Reward and pay off some of the outstanding debt.

Mining rig prices slide to lowest level in 2020

The downturn in the overall cryptocurrency market, coupled with the bankruptcy of large mining companies such as Celsius, has made it difficult for more and more miners to afford their expensive equipment and mining costs. According to Luxor’s Bitcoin ASIC price index, including: Antminer S19, S19 Pro, Whatsminer M30… and other miners with similar specifications (efficiency below 38 J/TH), its latest average price is about $41/TH, but in at the end of last year, it was as high as 106 US dollars / TH, a sharp drop of more than 60%, and the lowest level since the end of 2020.

But even as the price of bitcoin has fallen sharply from its November highs and many miners are struggling, Kimmell said that if Celsius decides to dump the equipment, it could still be attractive to the market (sell at a discount). This could present a great opportunity for well-capitalized miners to scale based on their deployment capabilities, electricity costs and the efficiency of Celsius equipment.

However, it should be noted that although Celsius Mining has invested a lot of money in the mining business, Celsius was accused by a Financial Times reporter last week that Celsius used a large amount of customer funds to invest in Celsius Mining through a credit of $750 million. It accused its chief executive, Alex Mashinsky, of reneging on a promise not to embezzle customer deposits.

Before the cryptocurrency bottoms out, indirectly entering the market by investing in mining machines can effectively reduce investment risks.


Post time: Sep-06-2022