Canadian giant Bitcoin (BTC) miner Bitfarms have been forced to sell nearly 50 percent of their BTC reserves, the equivalent of 3,000 BTC over the past week, due to the severe downturn in the crypto market. Previously, miners in the US did the same by selling 4,411 BTC throughout May 2022.
This was conveyed by the company based in Argentina on June 21, 2022.
According to Bitfarms, it has to adjust its strategy from "hodl" to "short" in order to increase the company's financial liquidity.
Bitfarms confirmed that it has sold a total of 3,000 Bitcoins (BTC) over the past week for around US$63 million to increase the company's liquidity by nearly US$100 million.
“This way, the company's Bitcoin reserves are reduced from around 6,349 BTC to a total of 3,349 BTC. Through this sale, the company has much lower BTC reserves than at the beginning of the year, which was 4,300 BTC,” said Jeff Lucas Bitfarms CFO Bitfarms in a press statement.
Bitcoin Miners Say They Are Overwhelmed by the Market
Bitfarms earns an average of 14 BTC per day, earning nearly 1,260 BTC every three months. Therefore, they can sell at a loss, considering the company bought 1,000 BTC for US$43.2 million in early January 2022. This same amount of Bitcoin can be bought now for less than half or closer to US$20.6 million.
But Lucas said, due to the volatility of the crypto market and already $2 trillion in evaporation since November 2021, companies would have to sell their BTC, among other factors, to reduce its debt to Galaxy Digital LLC (Galaxy) from $66 million to $38 million.
“Given the highly volatile market, we are continuing to take steps to increase liquidity and to reduce and strengthen our balance sheet. Specifically, we have sold 1,500 more Bitcoins and are no longer holding our entire daily BTC production,” Lucas added.
Even though they sell BTC in large amounts, that doesn't mean they are bearish about the cryptocurrency. The company, on the other hand, sees BTC as strong in the long term. It's just that the sell-off must be done for the sake of financial health and in order to continue operating.
Bitfarms owns 7 giant mining farms in Quebec (Canada), Washington (USA) and Paraguay. About 99 percent are powered by hydroelectric energy.
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