Iris Energy to eliminate mining equipment following $108M loan default

Luisa Crawford  Nov 22, 2022 13:14  UTC 05:14

2 Min Read

The current bear market in cryptocurrencies has claimed another victim: the Australian-based Bitcoin mining company Iris Energy. This makes Iris Energy the latest company to fall victim to the bear market. Due to the fact that it was unable to repay a loan on time, the company was forced to write off a significant percentage of its mining capacity.

It was revealed that as of November 18th, the firm had unplugged its hardware that was being used as collateral in a loan for $107.8 million. This information was found in a document that the company provided to the United States Securities and Exchange Commission on November 21st.

The corporation has made it clear that its divisions "do not generate enough cash flow to meet their respective debt financing obligations." as stated in their statement.

The company is unable to meet its monthly debt obligations of $7 million despite the fact that it generates a gross profit from bitcoin transactions of around $2 million per month.

Iris has now reduced its capacity for mining by about 3.6 exahashes per second (EH/s), which is the unit of measurement used for mining capabilities.

It has been said that there is still a capacity of around 2.4 EH/s, which is comprised of 1.1 EH/s of gear that is operational and 1.4 EH/s of rigs that are either on their way or are ready to be deployed.

Earlier this month, the corporation was served with a notice of default for the amount of $103 million. The notification was sent successfully.

Iris Energy primarily oversees the management of Bitcoin mining facilities in Canada that are exclusively fueled by sources of renewable energy.

At the beginning of August, the company's hash rate increased by more than four times its previous level as a direct result of electrifying its facilities in Canada.

Iris Energy (IREN) had a decline of 18% in its share price during the course of the trading day, and it was last seen trading at $1.65 in the after-hours market.

It achieved a new all-time low on November 21, plummeting 94% from its all-time high of $24.8, which it reached when it first began trading in November 2021. The high point was attained when it first started trading. Miners of Bitcoin are now suffering a triple whammy, as high hash rates and difficulty, high energy costs, and low Bitcoin prices all combine to make mining unprofitable. Miners of Bitcoin are currently experiencing a triple whammy.

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