Miner Bitfarms Sold Almost Half Its Bitcoin to Reduce Debt

Bitcoin miner Bitfarms (BITF) sold almost half its stash of the cryptocurrency in the past week for about $62 million to reduce debt as miners feel the squeeze of the crypto market downturn.

Bitfarms is adjusting its "hodling" strategy to "improve liquidity and strengthen its balance sheet," according to a Tuesday press release that played on a mistype of the word "hold." The sale of 3,000 BTC cuts the miner's holdings to 3,349 including month-to-date production.
Bitfarms, based in Toronto, also closed a $37 million equipment-financing deal with NYDIG, announced last week, bringing liquidity to $100 million.
The money raised in the sale helped the miner to reduce a bitcoin-backed credit facility from Galaxy Digital to $38 million. Last week, Bitfarms said it had sold BTC 1,500 to reduce the rolling loan to $66 million from $100 million.
A slouching bitcoin price has spurred miners' profit margins to dwindle – after many of the miners borrowed heavily to fund their operations.
Bitfarms was one of the miners with a strategy of keeping its daily bitcoin production on its balance sheet, using lending and share offerings to fund expansion and day-to-day costs.
Asked about selling bitcoin to improve cash flow or minimize stock dilution, Chief Mining Officer Ben Gagnon said in an interview published on April 22 that Bitfarm's at-the-market offering and borrowing against its BTC holdings were alternative options.
"We think that bitcoin is currently undervalued" and the long-term and medium-term potential of bitcoin "is significantly greater" than the cost of capital to borrow against the cryptocurrency, he said in April. At the time, BTC was about double today's price.
"While we remain bullish on long-term BTC price appreciation, this strategic change enables us to focus on our top priorities of maintaining our world-class mining operations and continuing to grow our business in anticipation of improved mining economics," Chief Financial Officer Jeff Lucas said in Tuesday's statement.
Bitfarms shares rose 6.8% on Nasdaq.

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Eliza Gkritsi

Eliza Gkritsi is CoinDesk's crypto mining reporter.

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