The prolonged slump in Bitcoin is making it more difficult for some miners to repay the up to $4 billion in loans they have backed by their equipment, posing a potential risk to major crypto lenders.
A growing number of loans are now underwater, according to analysts, as many of the mining rigs lenders accepted as collateral have now halved in value along with the price of the world’s largest digital token.
Few miners have defaulted on their loans so far, but recent sales are showing signs of distress. Core Scientific Inc. sold more than 2,000 Bitcoin in May to help cover operational costs. Meanwhile, Bitfarms Ltd. offloaded nearly half of its mined tokens earlier this month to pay down part of its $100 million loan with Galaxy Digital Holdings Ltd. It has also taken out another machine-backed loan from New York Digital Investment Group LLC.
