Bitfarms Sells Off Further Bitcoin To Reduce Crypto-Backed Debt
It appears that Bitfarms Ltd (TSX: BITF) has learned its lesson when it comes to debt backed by volatile cryptocurrencies. The firm in July further reduced its outstanding debt backed by Bitcoin, cutting the debt from US$38.0 million to $23.0 million.
The debt was reportedly repaid via a combination of the sale of bitcoin mined and cash in the treasury. The company in its monthly update this morning revealed that it sold a total of 1,623 bitcoin during the month of July, reducing bitcoin held in custody to just 2,021, down from 3,349 at the end of June, and 6,075 as of the end of May.
The firm has been forced to sell off its bitcoin holdings as a means of settling debt following the rapid drop in the value of the flagship crypto over the last several months. The company previously entered into a US$100 million bitcoin-backed credit facility in December with Galaxy Digital Holdings (TSX: GLXY), however with the falling price the company was forced to either post more collateral or reduce debt outstanding under the credit facility.
Outside of the continued pay-down on its debt, the company indicated that it increased total crypto mining capacity to 166 megawatts from 137 MW at the start of the month, thanks to the completion of work at once facility, the scaling of production at a second facility, and further production added at a third facility. The impact overall is that the firms hashrate grew from 3.6 EH/s to 3.8 EH/s, with production expected to hit 4.0 EH/s this month.
“Unseasonably high temperatures in Québec and Washington state late in the month also slightly lowered miner productivity and affected our corporate hashrate. With cooler temperatures and the completion of remaining miner redeployments, as well as the installation of new miners, we expect our hashrate will exceed our 4 EH/s target in August,” commented Chief Mining Officer Ben Gagnon.
Production during the month of July is said to have averaged 16.1 bitcoin per day, with the company mining a total of 500 bitcoin during the month. Production in dollar terms is said to average US$384,279 per day based on the recent bitcoin price of US$23,900.
Bitfarms last traded at $1.83 on the TSX.
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