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Bitcoin mining firm Iris Energy on verge of $103M loan default

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A tweet from Bitcoin Magazine Analyst Dylan LeClair stated BTC mining firm Iris Energy is close to defaulting on a $103 million loan held by the New York Digital Investment Group (NYDIG).

He continued by saying ASIC miners are held as collateral against the loan, meaning the mining equipment will be confiscated should Iris Energy fail to uphold its repayment schedule.

The terms of the loan call for capital and interest repayments totaling $7 million per month. Yet, the firm’s current mining revenue falls short, generating just $2 million per month.

Bitcoin miners under pressure

In recent weeks, price stagnation and rising mining difficulty have hampered Bitcoin mining profitability.

A report by the Hashrate Index website, released on October 19, said several factors have culminated in exerting “tremendous pressure on the Bitcoin mining industry” in Q3.

“With power costs swelling and hashprice crumbling, the cost to produce 1 BTC has risen drastically since last year.”

Tight margins have contributed to public firms selling mining equipment to pay down debt, leading to “distressed asset sales” materializing during the quarter.

Iris Energy’s miners have a market value estimate of between $65 – 70 million, significantly less than the principle amount owed.

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