WSJ reports bitcoin miners on sale with discounts exceeding 70%

Mining companies are forced to heavily liquidate their cryptocurrency mining equipment to cover losses from the market decline. The The Wall Street Journal reports.

According to Luxor Technology, 100-terahash ASIC miners are currently priced at around $24, whereas last year their average price was $106. The discount thus reaches 77%.

Mining companies were actively purchasing equipment and renting warehouse space during the rise in crypto prices, often financed with debt.

After a series of rate hikes by the U.S. Federal Reserve, the market reacted with a prolonged correction. As a result, producers of cryptocurrency mining hardware faced sizable losses. For many of them, selling ASIC miners is the only way to earn a living.

Last week, the publicly traded mining company and blockchain-hosting provider Core Scientific warned the SEC that it would not fulfill its obligations, including payment for equipment. Against the backdrop of bankruptcy threats, the company’s shares have fallen nearly 99% since the start of the year.

Similar circumstances are seen across other players. TeraWulf has lost 93% of its market capitalization. Stronghold Digital Mining’s shares have fallen 94%, Riot Blockchain by 74%, Hut 8 Mining by 70%, and Marathon Digital Holdings by 67%.

Some firms are forced to dispose of just-acquired equipment. At the end of October, Argo Blockchain said it will sell 3,843 new machines to raise capital.

The situation has attracted buyers of distressed assets. Grayscale Investments, a digital asset manager, has launched a product for co-investing in Bitcoin mining equipment.

Bitdeer, a mining-services provider founded by Jihan Wu, will establish a $250 million fund to purchase and operate cryptocurrency mining devices.

Yet mining can still be profitable for companies with low debt loads. According to Blockchain.com, the record hash rate indicates that more machines are joining the network.

Earlier, Compute North, a mining company and provider of infrastructure solutions for cloud crypto mining, filed for bankruptcy.

ForkLog previously reported that miners faced difficulties amid market stagnation, rising energy costs, and a drop in hash rate.

According to Arcane Research, the vast majority of public mining companies posted undistributed losses on their balance sheets, despite a strong 2021.

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