The Domino Effect – 235

Honey it's Ontario Bitcoin mining Operation halted amidst power disputes The Mining Company confirmed the Operation is still shuttered after Contractual disagreements with their Power provider Validus power Hut 8th Bitcoin mining Operation in North Bay Ontario and this Is a big deal guys because remember HUD Eight we we thought we're doing okay we Have a few we have Marathon digital But it seems like the domino effect is Hitting here a lot of it of course Surrounding the price of energy and the Fact of the matter is is a lot of these Power agreements and power companies That were or the power agreements the Power companies were putting out there Or in a position of not being as Straightforward as I think people Expected and it's putting miners in an Awkward position and the price of Bitcoin has to come up significantly to Really accommodate for all the increase In energy costs that's been happening Right but previously HUD ape notified The public of problems with validus in November of 2022 as the firm reported in Its Q3 operations update that it had Issued a notice of default to validus For failing to hit certain operational Milestones Mining at the facility site was Completely halted two weeks after this

I show You how To Make Huge Profits In A Short Time With Cryptos! I show You how To Make Huge Profits In A Short Time With Cryptos! Welcome to the Future of Money

As validus stopped supplying power to The facility while delivering its own Default notice for payments that it Claimed Hut 8 failed to make the mining Company's Q3 report also stated that Validus also has demanded the company or That the company make payments for Delivery of energy that are higher than These negotiated under the terms of the PPA see the thing that gets really Interesting here because obviously this Hit me before a lot of other people or The reports you know technically I guess It was hitting around the same time We're just not getting the reports of it These these power Agreements are not Always set in stone as much as you would Think they are and there are ways around It right I've I've seen the ways around It it's very frustrating and it does Feel uh very unfair but that is life to A certain extent it's just at the same Time you know you had a declining price Obviously in Bitcoin due to all of the Issues going on and it puts miners in a Bad position right they over leverage They got out too large of loans in a lot Of cases and the power companies are Also in trouble because of obviously new Regulations surrounding the cost of of Power we also have of course Availability of energy which is Obviously a huge problem and then as far As the relationship for North America

And the price of energy there is a big Effect of not continuing with that Pipeline that would have definitely Changed things I think from an energy Perspective between Canada and the US That was obviously put to the side Fluctuating power costs can have a major Impact on Bitcoin mining operations in Favorable power purchasing Agreements Are an integral part of a sustainable Firm according to their most recent December update the company is Continuing to explore alternatives to Mitigate the impact of the dispute with The third party energy supplier to the Site including through organic and Inorganic growth opportunities hot 8 has Indicated that it fully intends to Resolve the issue and restart operations As soon as possible whether that be Through a resolution involving validus Or as the company indicated a potential Alternative power supplier Now I think that obviously like I think that When it comes to ppas and look it's Probably I highly advised that you get Some legal assistance when looking at uh These ppas in my position moving forward There will always be some sort of legal Representation when when uh signing in Before signing any PPA now that does Cost you more money but if the flip side To that is that you end up with a

Completely shut down Farm then obviously It's worth the money up front and that Is one mistake that I will regret for Quite some time right and it's one that I'll warn you guys about now before we Get into you know starting to really Spin up mining again a lot but does that Mean the hash power goes away and the Answer to that is no why is the answer To that no well currently what happened Is a lot of the large miners going away Because they took out loans backed by The hardware that was mining the Cryptocurrency well If you took out a loan on a machine that Was worth twelve thousand dollars you Know last year and it now it's worth two Thousand dollars and then the company Recoups their loss by taking the mining Machine back it now has no way to sell That on the used Market to make their Money back on the loan it's actually so Bad the margins are so terrible for them That the only option for them now is to Begin mining with these machines quite Interestingly so crypto lenders now are Morphing into miners as repossessed rigs Pile up one way for the lenders to Prevent further losses from defaulted Loans is to keep the collateralized Machines running and generate some Income crypto lenders have repossessed So many Bitcoin mining rigs they're Resorting to plugging them in and

Extracting tokens themselves lenders are Getting creative as to what they can do With mining machines as they accepted as Collateral for some four billion dollars In rig-backed loans that were under Wrote when the rally of Bitcoin seemed Unstoppable with the recent surge in Loan defaults and plunging Cryptocurrencies the value of new Generation machines has dropped 85 Percent according to data from Luxor Technologies While some machines are just sitting in A warehouse waiting for prices to Recover lenders like New York digital Investment Group LLC are using debt Negotiations to find alternative Solutions in December NY digg agreed to Pay Green Ridge generation Holdings not Only for its mining rigs but to operate Them in exchange for debt reduction the Deal effectively made Green Ridge one of The largest Bitcoin miners a hosting Firm while NY digg became the miner we Talked about this last week lenders are Flooded with mining rigs said Wolfie Zao Head of research at the minor mag a Research arm of the mining consultancy Blocks Brig one of the lenders or one of The way or one way for the lenders there We go to prevent further losses from Defaulted loans is to keep the Collateralized machines running and Generate some income

Now you can see here crypto mining loans At risk in like It's crazy Um it's an option lenders are taking More seriously especially those that Already have mining capabilities to Build on including Galaxy digital LP and Digital currency Groups Incorporated Foundry Bitcoin mining which uses Specialized computers known as rigs to Validate transactions on the blockchain In exchange for rewards in the token was Among the most lucrative businesses in Crypto miners had sought to leverage That value in the run-up of bitcoin's Historic rally but with a surge in Energy prices and Bitcoin down 58 on the Year a number of loans are now under Water a valkyrie index of Bitcoin miners Is down 75 from a year ago even after This week's 30 Jump on optimism a U.S Economic recovery could prop up crypto Prices And why dig originated about 378 million Dollars in rigged back loans to minors Between October of 2020 and may of 2022. According to data compiled by the Minermag already it's received about 26 200 machines from stronghold digital Mining Incorporated to eliminate the Minus 67 million dollars of debt and It's likely to take over another batch Of machines from Iris energy after it Defaulted on a 103 million dollar loan

Uh earlier so here we go NY dig on the Hook for Argo Green Ridge Iris energy Core scientific stronghold rhodium and Uh cathedra so obviously uh what you Would end up seeing right is I think it Said it's already done 26 000 from Stronghold core scientific is getting Kind of bailed out by BlackRock so maybe That'll be okay we'll have to see how This goes right Um so lenders have been moving more rigs Out of store and said Mason japa chief Executive at crypto mining Services Company blockware Solutions quote some Lenders are already on the lookout for High quality hosting sites he said Lenders can recover some losses if they Can find Reliable Bitcoin mining Facilities with cheap electricity but They are hard to find Of course lenders may still choose to Sell some of the machines even at a Steep discount he said but they may not Want to sell a large amount as more Miners such as score scientific go Bankrupt even more machines are expected To hit the market if that depresses Prices even further that means even Greater losses for lenders now as we Start to see this recovery what's Important to pay attention to is going To be the price or the cost to Mint a Bitcoin and the reason behind this right Is going to primarily be the fact that

It will directly influence what the Banks are willing to sell the Bitcoin For especially if they think or are even Aware of the having cycle right which Means they're only going to be wanting To recoup costs uh you know if they have To and to a certain extent recouping Some of the cost and then holding on to The rest of the Bitcoin in hopes for a Pump in the future could be a legitimate Strategy from some of them and we'll Kind of just have to see where they Decide to go from here but thanks for Checking out this clip from the crypto Mining show you can check out the full Episode here or more crypto content down Here also I'd like you to check out my Locals page at son of a tech.locals.com Where you can become a member for free Or choose to be a five dollar a month Supporter that unlocks additional Content

You May Also Like