According to Sam Bankman-Fried, there is no acquisition synergy and crypto miners do not fit into the company’s primary goal.
Sam Bankman-Fried, the creator of the cryptocurrency exchange FTX, put an end to rumors that the business was considering buying struggling crypto mining firms by stating on Twitter on Saturday that they “aren’t actually looking into the space.”
“Really not sure why the meme about FTX and mining companies is spreading, the actual quote was that we *aren’t* really looking into the space,” clarified Bankman-Fried on Twitter on Saturday.
In an interview with Bloomberg on Friday, SBF, the creator of FTX stated that he did not want to rule out the prospect of a “compelling opportunity” in the mining sector, leading to the following speculation:
“There might come along a really compelling opportunity for us — I definitely don’t want to discount that possibility.”
SBF was forced to clarify that the company is “not really looking at miners” but is “glad to have conversations” with mining businesses because it appears that the comment was taken out of context.
Additionally, Sam Bankman-Fried said in the interview that he saw no acquisition synergy between crypto miners and the company’s main strategy.
“I don’t see any particular reasons that we need to have, you know, an integration with a crypto miner.”
“From a strategic perspective, there’s no particular obvious synergy necessarily from an acquisition standpoint,” he added.
Mining loans are under pressure
Sam Bankman-Fried was questioned if he was investigating mining companies in the midst of a declining cryptocurrency industry that has seen Bitcoin mining income drop significantly this year.
Energy prices have also increased dramatically as a result of the Russian invasion of Ukraine, which has had a twofold effect on miners of all sizes.
According to Bitinfocharts, mining profitability, which is calculated as the daily dollars per terahashes per second, has fallen to levels last seen in October 2020. The profitability of Bitcoin mining is currently $0.0956 per day for 1Th/s, down 80% from the peak of $0.464 in 2021.
According to a report from Bloomberg on June 24, there are up to $4 billion worth of loans for Bitcoin mining, many of which are now underwater due to the decline in the value of both bitcoin and mining rigs.
It was reported last week that Bitcoin (BTC) mining revenue has dropped at year lows not seen since the middle of 2021, falling to $14.40 million on June 17.
According to data from Arcane Research published in June, public miners have been compelled to start selling up their shares due to the declining profitability of the industry. It turned out that several of these businesses sold all of their BTC output in May, most likely to pay for running expenses and loan repayments.