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The Argentina-based crypto mining company that operates in Canada, Bitfarms, has announced that it is modifying its HODL strategy for the company’s liquidity improvement during these hard times.
Bitfarms sells Bitcoin worth $63M
On June 21, the mining giant shared a press release that revealed that Bitfarms had sold 3,000 Bitcoin over the last week for around $63 million with the aim to improve its liquidity by nearly $100 million.
#Bitfarms Adjusts #HODL Strategy
• Pays down BTC-back credit facility to US$38 million
• Currently holds total of 3,349 BTC
• Daily BTC production of approximately 14 BTC adds further liquidity🔗 More info: https://t.co/xCcIUHkWsU
🚀 $BITF #BTC #BitcoinMining #Blockchain pic.twitter.com/L58siaA99c
— Bitfarms (@Bitfarms_io) June 21, 2022
Notably, Bitfarms will use a portion of the proceeds to rebalance its indebtedness with Galaxy Digital LLC by reducing its BTC-backed credit facility to a further $28 million, from $66 million to $38 million.
With the move, the company has reduced its Bitcoin reserves by 3,000 from around 6,349 BTC to 3,349 BTC, counting June’s daily production. Moreover, the company is left with much lower BTC reserves than it had at the beginning of 2022, which was 4,300 BTC.
The data provided by the company shows that Bitfarms can generate an average of 14 BTC per day or roughly 1,260 BTC per quarter. Given that it purchased 1,000 BTC for $43.2 million at the beginning of January, it can thus afford to sell at a loss. At the current market price, the same quantity of Bitcoin could be purchased for $20.6, which is less than half the price.
Extreme market volatility
Jeff Lucas, the CFO at Bitfarms, said that the primary reason behind the selling of the company’s Bitcoin holdings was extreme volatility, among other factors. He stated:
“In consideration of extreme volatility in the markets, we have continued to take action to enhance liquidity and to de-leverage and strengthen our balance sheet. Specifically, we sold 1,500 more Bitcoin and are no longer HODLing all our daily BTC production. “
He said that the company is still bullish on long-term BTC price appreciation, but the change in its HODLing strategy enables it to “focus on our top priorities of maintaining our world-class mining operations.”
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