Iris Energy, an Australian Bitcoin mining company, is the latest to be squeezed by the crypto bear market. After defaulting on a loan, the company lost a significant amount of its mining power.
A recording by the firm to the U.S. Protections and Trade Commission on Nov. 21 uncovered that it has turned off its equipment utilized as guarantee in a $107.8 million credit as of Nov. 18.
The company stated that the units “produce insufficient cash flow to service their respective debt financing obligations.”Despite the operation’s monthly Bitcoin gross profit of approximately $2 million, it is unable to pay off its debt obligations of $7 million.
Iris’s mining power capacity has now decreased by approximately 3.6 EH/s (exahashes per second).It stated that capacity remained around 2.4 EH/s, comprising 1.1 EH/s of operating hardware and 1.4 EH/s of rigs awaiting deployment or in transit.
According to the company, “data center capacity and development pipeline are unaffected by the recent events” and that it will continue to look for ways to use its capacity.”Using $75 million of prepayments already made to Bitmain in respect of an additional 7.5 EH/s of contracted miners for further self-mining,” Iris is also considering.
A default notice for $103 million was served on the company earlier this month.The majority of Iris Energy’s BTC mining facilities in Canada are run entirely on renewable energy.After activating facilities in Canada, the company doubled its hash rate at the beginning of August.
In after-hours trading, Iris Energy stock (IREN) fell 18% on the day to $1.65.When it first started trading in November 2021, it reached its all-time high of $24.8 and its all-time low of $22.1 on November 21.
The triple whammy of high hash rates and difficulty, high energy costs, and low Bitcoin prices currently afflict Bitcoin miners.
Many of them are beginning to sell the asset or turn off their hardware as a result of this.Charles Edwards, the founder of Capriole Fund, made the observation on November 21 that the current rates of miner selling were the most aggressive in almost seven years.
He added, “We are going to see a lot of Bitcoin miners out of business if price doesn’t go up soon.”
It is highly unlikely that the price will rise anytime soon. On Tuesday, November 22, in the early hours of Asian trading, Bitcoin fell to a new bear cycle low of $15,649.