Stronghold Digital Mining (SDIG), a bitcoin mining firm located in the US, reveals fresh steps to increase outstanding debt and reorganize its financial operations on Tuesday.
SDIG intends to release 26,000 of its mining rigs, of which 18,700 are now operational, under an arrangement with lender New York Digital Investment Group (NYDIG). The sale will provide cash and pay down Stronghold’s debt of $67.4 million. As of August 12, the corporation had $47 million in cash on hand prior to the arrangement.
With a total hash rate of 2.5 EH/s when SDIG returns 26,000 rigs, its operating fleet will consist of around 16,000 miners. The total power demand of 50ā55 megawatts will be required to achieve a hash rate capable of above 1.4 EH/s.
The present challenges for miners are mostly a result of the crypto market fall. The income from mining Bitcoin (BTC) fell to a one-year low in July, coming in at a little under $15 million. Around this period, Compass Mining and other mining companies were both obliged to sell their rigs due to impending insolvency.
For the last three months, Bitcoin miners hodl-ed 27% less owing to the requirement for big sell-offs.
According to insiders in the sector, the crypto bear market will select out businesses that can’t survive over the long run while enabling others to reorganize.
The restructuring and growth of SDIG are also accompanied by a contract with WhiteHawk that increases the amount of borrowing money by $20 million. The corporation will “opportunistically” spend the funds to buy additional miners, according to the official announcement.
The SDIG restructuring will offer “significantly improved liquidity and flexibility to deploy capital opportunistically in a way that creates equity value through cycles in the Bitcoin and power market,” according to Greg Beard, co-chairman and chief executive officer of Stronghold.
Restructuring could be a good idea despite the sell-offs since, according to experts, crypto mining is still profitable in the long run. Mining revenue reversed course with a 68.6% growth in August after hitting a low in July.
A New York court recently granted the Celsius Network’s request to incorporate BTC mining in its post-bankruptcy refinancing plans.
