Categories: Crypto NewsNews

SBF denies FTX is targeting troubled crypto mining  companies

Published by
Nonhlanhla P Dube

According to Sam Bankman-Fried, crypto miners do not fit into the company’s primary strategy and there is no acquisition synergy. The creator of crypto exchange FTX, Sam Bankman-Fried, has put an end to speculation that the company is looking to acquire distressed crypto mining companies, stating on Twitter on Saturday that they “aren’t really looking into the space.”

“Really not sure why the meme about FTX and mining companies is spreading, the actual quote was that we aren’t really looking into the space,”-Fried explained on Twitter on Saturday.

The FTX founder indicated in an interview with Bloomberg on Friday that he did not want to rule out the prospect of a “compelling opportunity” in the mining industry, stating:

“There might come along a really compelling opportunity for us—I definitely don’t want to discount that possibility.” However, the quote appears to have been taken out of context, forcing SBF to clarify that the firm is “not particularly looking at miners” but is “happy to have conversations” with mining companies. “From a strategic perspective, there’s no particular obvious synergy necessarily from an acquisition standpoint,” he continued.

Mining loans are under pressure.

Bankman-Fried was asked if he was looking into mining firms in the midst of a declining crypto market, which has seen Bitcoin mining revenue plummet dramatically this year.

Simultaneously, the Russian invasion of Ukraine has caused energy costs to increase, having a two-fold impact on miners of all sizes.

According to Bitinfocharts, mining profitability, which is measured in daily dollars per terahashes per second, has reached lows not seen since October 2020. At the time of writing, Bitcoin mining profitability is R1.56 per day for 1 T/s, down 80 % from the 2021 high of R7.55.

Bloomberg reported on June 24 that there were up to R65 billion in Bitcoin mining loans, with a rising percentage of them being underwater as Bitcoin and mining gear prices have collapsed.

According to Cointelegraph, Bitcoin (BTC) mining revenue has been mimicking year-lows not seen since mid-2021, with Bitcoin mining revenue plunging to R234 million on June 17.

According to Arcane Research data from June, the declining profitability of mining has led public miners to begin dumping their shares. It was uncovered that several of these companies sold all of their BTC production in May, most likely to fund operating expenses and loan repayments.

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Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at nonhlanhla@rateweb.co.za

Published by
Nonhlanhla P Dube
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