Last updated on May 29th, 2023 at 11:22 am
Binance announced on Friday that it would be launching a $500 million pool for bitcoin miners. If you’re a miner in need of working capital, this line of credit of up to $500 million could come in handy. According to the cryptocurrency trading platform, this is being done to support a thriving digital asset ecosystem.
Due to rising production costs, cryptocurrency miners’ profit margins are narrowing. There is a real danger that many bitcoin miners will go out of business due to a lack of working capital.
Binance loans will carry a 5–10% interest rate and have a term of 18–24 months. Borrowers will be required to provide collateral for the loans.
Binance is also interested in partnering with providers of cloud mining services. This is consistent with the cryptocurrency exchange’s stated intention to launch cloud mining services.
Declining Profits
The difficulty of mining Bitcoin rose by a record 13% in just two weeks, putting miners under extreme stress as the price of Bitcoin dropped, and energy costs rose. As a result, they’ve been selling Bitcoin to compensate for declining profits. There were months when miners sold more than they had mined.
Many companies have struggled to stay afloat, and many have failed. Compute North is one such company that has recently filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of Texas.
Many mining platforms, including Iris Energy, have recently sold stock to raise millions of dollars. Compass Mining pulled the plug on its Georgia operations. Poolin, one of the largest Bitcoin mining pools, has temporarily halted withdrawals due to the prolonged bear market.
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