Binance launches a R9.1 billion lending fund for Bitcoin miners
Binance Pool, the company's mining service, will provide loans for both private and publicly listed Bitcoin miners, who will be required to guarantee security in the form of physical or digital assets in order to secure loans with terms ranging from 18 to 24 months. Binance will impose interest rates ranging from 5% to 10%.
The initiative comes after a difficult few months for Bitcoin miners as the price of bitcoin fell. Miners' revenues have plummeted due to low bitcoin prices, with Compute North filing bankruptcy.
According to data from The Block Research, bitcoin miners' earnings plummeted 16.2% to over R9.2 billion last month, marking the fifth decline in the last six months and the lowest level since November 2020. Binance is not the only company attempting to help the cryptocurrency mining sector. Jihan Wu, the creator of Bitmain in China, established a R4.5 billion fund last month to purchase troubled assets from Bitcoin miners. Wu's Bitdeer Technologies Holding Co. intends to invest R909 million of its own funds before seeking an additional R3.6 billion from outside investors.
Maple Finance, a DeFi platform, also announced a R5.5 billion lending pool for Bitcoin miners last month. The platform will charge interest rates ranging from 15% to 20% and will offer loans with terms ranging from 12 to 18 months.
Grayscale, a crypto asset management, established a new corporation called Grayscale Digital Infrastructure Opportunities LLC earlier this month to invest in Bitcoin mining technology. The entity intends to buy mining rigs and aims to benefit by selling the bitcoins acquired.
