Cryptocurrency lender BlockFi, which filed for bankruptcy weeks after FTX collapsed, plans to sell around $160 million in Bitcoin (BTC) miner-backed loans, according to Bloomberg.
According to the report citing anonymous sources, the loans were collateralized by around 68,000 BTC mining machines. After a sharp drop in the number of BTC miners last year, some loans have defaulted and some have become undercollateralized.
According to Hashrate Index Data, the price of Bitcoin mining rigs has fallen by about 85% over the past year. In addition, falling BTC prices and rising electricity costs in 2022 will squeeze miners' profit margins, affecting demand for BTC mining machines.
BlockFi is a major lender to the struggling mining industry, with several players struggling with liquidity over the past year. One of the largest players, Core Scientific, filed for Chapter 11 bankruptcy protection in December 2022.
Meanwhile, Argo Blockchain sold its Texas mining facility to Galaxy Digital for $65 million and secured a $35 million loan from the company in late December 2022.
