{"id":12993,"date":"2022-06-27T16:00:24","date_gmt":"2022-06-27T16:00:24","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/4b-in-bitcoin-mining-loans-are-in-distress-jpmorgan-analyst-says-price-pressure-stems-from-miner-sales-bitcoin-news\/"},"modified":"2022-06-27T16:00:24","modified_gmt":"2022-06-27T16:00:24","slug":"4b-in-bitcoin-mining-loans-are-in-distress-jpmorgan-analyst-says-price-pressure-stems-from-miner-sales-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/4b-in-bitcoin-mining-loans-are-in-distress-jpmorgan-analyst-says-price-pressure-stems-from-miner-sales-bitcoin-news\/","title":{"rendered":"$4B in Bitcoin Mining Loans Are in Distress \u2014 JPMorgan Analyst Says Price Pressure Stems From Miner Sales \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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Cryptocurrency-related lending has become a black smudge for the industry these days and according to a recent report, bitcoin\u2019s low price has put billions in mining loans under stress. The report, which quotes the co-founder of mining company Luxor Technologies, Ethan Vera, says that roughly $4 billion in loans backed by crypto mining rigs are extremely close to running a risk of default.<\/strong><\/p>\n

Analyst Says Miners \u2018Are Nervous About Their Loan Books\u2019<\/h2>\n

The price of bitcoin (BTC<\/a>) is 21% lower than it was two weeks ago and the price drop has hurt BTC<\/a> miners a great deal. According to a report<\/a> from Bloomberg, analysts say that a number of loans backed by mining machines are underwater.<\/p>\n

Luxor\u2019s Ethan Vera estimates that around $4 billion in loans backed by mining rigs are under stress. \u201cThey are nervous about their loan books, especially those with high collateral ratios,\u201d Vera explained to Bloomberg\u2019s David Pan.<\/p>\n

Using current BTC<\/a> exchange rates, only 14 SHA256-based mining rigs are profiting with an electrical cost of around $0.05 per kilowatt-hour (kWh), according to asicminervalue.com statistics<\/a>. The top mining machines manufactured by Bitmain and Microbt, gather between $2 to around $4.50 per day with an electrical cost of around $0.05 per kWh.<\/p>\n

The report notes that miners are selling BTC<\/a> to bolster operational costs and it highlighted that in May, Core Scientific Inc. sold over 2,000 BTC<\/a> for operational expenses.<\/p>\n

\u201cBitcoin miners, broadly speaking, are feeling pain,\u201d Luka Jankovic, head of lending at Galaxy Digital detailed in the report. \u201cA lot of operations have become net IRR negative at these levels. Machine values have plummeted and are still in price discovery mode, which is compounded by volatile energy prices and limited supply for rack space,\u201d Jankovic added.<\/p>\n

JPMorgan Analyst Says Bitcoin Miners Continue to Put Pressure on the Price<\/h2>\n

Traditionally, during bear markets, bitcoin miners are forced to sell off holdings which puts even more pressure on the price. Another report, quoting JPMorgan analyst Nikolaos Panigirtzoglou explained<\/a> that bitcoin miners that need to sell will keep weight on the current downward pressure affecting BTC<\/a> markets in recent times.<\/p>\n

Panigirtzoglou and his group of strategists at JPMorgan believe that privately-held miners may have sold a large share of block subsidies to help operational costs. A number of reports<\/a> had shown that miners have been selling large quantities of BTC<\/a> since February 2022.<\/p>\n

\u201cBitcoin miners have been net distributors since the recent sell-off,\u201d the team of onchain analysts at Glassnode detailed<\/a> on June 2. \u201cMiners balances have recently declined at a peak rate of 5k to 8k BTC<\/a> per month ($150M to $240M at $30k BTC<\/a>).\u201d<\/p>\n

During the past few weeks, a handful of crypto lenders have also been under severe stress and some are dealing with liquidations. The crypto lender Celsius has been under the crypto community\u2019s scrutiny for alleged liquidations and rumors about restructuring and insolvency.<\/p>\n

Loans tied to the BTC<\/a> mining industry may force miners to sell even more BTC<\/a> if prices go lower than today\u2019s current exchange rates.<\/p>\n

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Bitcoin Miners<\/a>, Bitcoin mining<\/a>, Bitcoin Price<\/a>, BTC Mining<\/a>, BTC Price<\/a>, Celsius<\/a>, Crypto Lenders<\/a>, Ethan Vera<\/a>, Galaxy Digital<\/a>, glassnode<\/a>, jpmorgan<\/a>, JPMorgan analyst<\/a>, loan stress<\/a>, loan underwater<\/a>, loans<\/a>, Luka Jankovic<\/a>, Luxor Mining<\/a>, Luxor Technologies<\/a>, mining<\/a>, mining bitcoin<\/a>, Mining BTC<\/a>, Mining Operations<\/a>, Nikolaos Panigirtzoglou<\/a><\/div>\n<\/div>\n

What do you think about the pressure bitcoin miners are feeling from the lower bitcoin price? Let us know what you think about this subject in the comments section below.<\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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