A bitcoin mining company will sell its assets to pay off its debt

The long winter in the crypto market is a problem for some companies.

Bitcoin mining company Stronghold has announced a debt reduction plan. The company has reached an agreement with the lender New York Digital Investment Group (NYDIG) and another involved broker, under which it will return 26,200 pieces of equipment used to mine bitcoin in exchange for a partial debt write-off. The drop in the BTC price from the November 2021 peak by more than 60% has hit the miners of this virtual currency hard. As a result, some of them even started selling some of the Bitcoins they mined.

Stronghold gives up the excavators to stay afloat and pay off some of the debt

The over 60% decline in Bitcoin's value since ATH in November 2021 had an extreme impact on the industry. Most of the miners of this virtual currency suffered from this. One example is Stronghold, a cryptocurrency mine that aims to be environmentally friendly.

The company's quarterly report shows that it intends to implement a debt reduction plan. Following the release of this information, its share prices fell sharply as it depreciated by nearly 18%.

The company has reached an agreement with the NYDIG lender and another participating broker to return approximately 26,200 BTC mining equipment in exchange for a $ 67.4 million debt cancellation.

Stronghold also received up to $ 20 million in additional creditworthiness from WhiteHawk Capital. The concluded agreements are to reduce the debt of this company by a total of USD 79 million. Unfortunately, it only accounts for 55% of its total debt. Under these circumstances, the company has an additional $ 64 million to pay back.

The fall in the Bitcoin price is devastating, especially for some miners

Many mining companies that were not well prepared for the cryptocurrency winter had to sell some of the Bitcoins they mined to cover the costs of their operations. To make matters worse, they pay a large amount of funds for both the equipment intended for mining BTC and the energy necessary to power it.

Several die-hard HODLers from this sector have decided to cash their reserves in the largest virtual currency. According to a report from Arcane Research, in June this year they sold about 15,000 Bitcoins. 

These movements indicate serious financial problems for such companies. Stronghold is a company that, instead of selling the most popular cryptocurrency at over 60% discount, preferred to give away some of its equipment. Moreover, the company claims that this move will not affect its Bitcoin production capacity in the long run. The people who control this company prefer to wait patiently to get the excavators at lower prices.