Since the cryptocurrency market fell below $30,000, Bitcoin miners have encountered increasing profitability challenges.
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Especially if Celsius Network chooses to sell its own mining operation, a bankruptcy filing by Celsius Network might wreak havoc on the crypto-mining industry.
The mining unit of Celsius has also filed for Chapter 11 bankruptcy protection, revealing ownership of 80,850 mining rigs, of which 43,633 are operational.
It anticipates increasing its mining capacity to over 120,000 rigs and producing over 10,000 Bitcoin by the end of the year. This makes Celsius one of the industry’s largest miners.
However, the company’s financial difficulties might compel it to sell off sections or possibly the whole mining operation, adding to the strain on an industry already struggling with poor profitability and falling mining rig prices.
Matthew Kimmell, a digital asset analyst at CoinShares, told Bloomberg that Celsius Mining’s sale of equipment will exert more downward pressure on prices of machines that are already decreasing.
Celsius offers mining equipment
Celsius apparently sold around 7,000 mining machines at a private auction before declaring bankruptcy. After restructuring, it is unknown if the company would sell the whole mining operation or retain a portion of it.
According to Ethan Vera, the COO of Luxor Technologies, the firm might lose between 60 and 70 percent of its original investment if it decides to sell.
Under certain circumstances, Kimmel feels this might be a terrific value for whoever purchases it. However, he cannot see Celsius selling the whole mining unit.
Following the restructure, it seems Celsius intends to maintain at least a portion of the Celsius Mining activities to produce Bitcoin rewards.
Also Read: Ethereum (ETH) To Move To Proof-Of-Stake Beginning September 19
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