Bitcoin Mining Company Bitfarms Third Quarter report indicates that miners have sold more BTC than in the quarter. The miner had sold 2,595 BTC and was mining 1,515 BTC.
Miners focused on cutting costs and bolstering their position to survive the bear market by slashing debt during the quarter.
However, miners still hold $55 million of machine-backed debt and $23 million of Bitcoin-backed debt.
Bitfarm liquidity in the spotlight
Bitcoin Mining Analyst Jalan Mereld Said Bitfarms’ bitcoin sale helped ease the burden of debt, but miners don’t have much bitcoin left.
“(Bitfarms) has $38 million in cash and 2,064 bitcoins. It’s only $44 million.”
The price of the main digital asset is another big challenge for the company as it needs to maintain 125% collateral value of the loan.
According to Mellerud, 2,064 of the entire Bitcoin stack of miners represents 141% of the loan. Therefore, if the price of BTC falls to around $14,200, the company’s loans could be liquidated.
Following this, analyst Mellerud concluded that “the company’s liquidity is insufficient to fund its planned expansion.”
Bitfarms keeps costs down
Bitfarms’ third-quarter report showed that the company’s general and administrative expenses were down 15% to $6 million, excluding non-cash stock-based compensation.
Speaking of this, Mellerud praised the company for keeping production costs to a minimum while keeping administration costs relatively low compared to its competitors.
Bitfarm charges significantly lower than the industry median of about $0.05 per kWh, according to Mellerud, allowing for cheaper power. Bitfarms will pay him $0.027 per kWh in Washington, $0.03 per kWh in Argentina, and $0.046 per kWh in Quebec.
Meanwhile, most of the company’s revenue comes from its Quebec facility, which accounts for over 80% of its revenue.
But the bitcoin mining firm’s plans to expand into South America have stalled due to bureaucracy. said there is.