According to a press release, the company sold a total of 3,000 Bitcoins (BTC) last week for about US$63 million to improve the company's liquidity to nearly US$100 million.
#Bitfarms Adjustment # StrategyHODL
• Reduce btc support credit to US$38 million
• Currently holding a total of 3,349 BTC
• Daily BTC output of about 14 BTC adds liquidity🚀 $ BITF #Ecoinomic #BitcoinMining #Blockchain
– Bitfarms (@Bitfarms_io) June 21, 2022
In this way, the company's Bitcoin reserves have dropped from around 6,349 BTC to 3,349 BTC, including the daily output of what it carried with it in June.Through this sale, the company has left much lower BTC reserves than at the beginning of the year, which is 4,300 BTC.
Dealing with a volatile market: it's not easy
According to the company's data, Bitfarms can produce an average of 14 BTC per day, earning nearly 1,260 BTC quarterly. As a result, they can afford to sell losses when the company bought 1,000 BTC for $43.2 million in early January.This same amount of Bitcoin can be bought right now for less than half or nearly $20.6 million.
However, Bitfarms CHIEF Financial Officer Jeff Lucas said that due to the volatility of the cryptocurrency market, the company had to sell its stake, among other factors, to reduce its debt to Galaxy Digital LLC (Galaxy) from $66 million to $38 million.
"With the market situation extremely volatile, we have continued to take steps to improve liquidity and remove leverage and strengthen our balance sheet.Specifically, we sold an additional 1,500 Bitcoins and no longer HODLed our entire daily BTC output. ”
Bitfarms must sell its loss-making Bitcoins to capitalize
Lucas pointed out that while they remain optimistic about bitcoin's price in the long term, they must focus on the company's top priorities of maintaining their position as world-class mining operators while continuing to expand their business.
"We believe that selling a portion of btc held and produced daily as a source of liquidity is the best and least expensive method in the current market environment."
Bitfarms has seven industrial-scale facilities in Quebec, Washington and Paraguay, powered 99% by hydroelectric power and secured by long-term energy contracts.
Therefore, despite the financial problems it is facing, just as most major cryptocurrency companies have had to cut staff and costs, it should be noted that, if market conditions change, Bitfarms will alone return to its position as one of the most profitable miners, thanks to the production of new BTC daily.
