By George Ward
Leading Crypto-mining company — Iris Energy has the potential to go underwater as it is close to defaulting on a loan and might not pay it due to tight mining margins. Dylan LeClair — an analyst from a popular news outlet, tweeted that the BTC mining firm is near defaulting on a $103 million loan.
According to LeClair, the loan is now held by the New York Digital Investment Group (NYDIG). LeClair said that these loan companies hold the mining equipment as collateral against the debt owed by the crypto-mining company. If Iris Energy fails to repay, it would have to forfeit the mining equipment.
The conditions of the loan demand that there are capital and interest repayments of up to $7 million per month. However, the current mining profit of the company is $2 million each month, falling short of monthly repayment.
Earlier in the week, Dylan LeClair tweeted about Iris Energy being close to defaulting on $103m in loans to acquire NYDIG’s special purpose vehicles. Recently, Bitcoin miners have faced intense pressure.
The falling prices and increased difficulty in mining have affected Bitcoin mining profitability. Hashrate Index reported on October 19 that various factors are responsible for the intense pressure the Bitcoin mining industry is facing in Q3.
The report stated, “with the power costs rising and hash price reducing, the cost of production of one BTC has skyrocketed since the previous year.”
The closeness of margins also contributed to top firms selling their mining equipment to pay their debts which led to ‘distressed sales of mining equipment flourishing in this quarter. Nevertheless, Iris Energy has a market worth between $65–70 million, notably less than the amount the company owes.
Iris Energy Mined 325 Bitcoin In September
According to multiple reports, Iris Energy mined 325 BTC in September. Also, the company reached 2,729 Peta-hashes per second (24% from August) as its average operating hashrate. The BTC mining firm also dropped a corporate update for September that revealed an increase in BTC output mining. In addition, the firm experienced revenue of $6.2 million, down by 6% compared to August.
The increased hash rate record in September resulted from the energy consumption from Iris Energy’s third operating site. The site is a 50-megawatt operation based in Prince George, British Columbia. The company plans to expand the Mackenzie site from 50MW to 80MW by Q4.