Alameda/FTX invested heavily in Bitcoin miner Genesis Digital
On top of the collapse of the world’s former second largest cryptocurrency exchange FTX, disgraced founder, Sam Bankman-Fried, placed his biggest bet with Bitcoin mining company Genesis Digital Assets.
According to a story published by Bloomberg on Dec. 2, Alameda continued to pour money into the company even as the price of Bitcoin fell and rising energy costs wreaked havoc across the sector.
During a capital round in April, Alameda and FTX made their largest venture investment to date, valuing the firm at $5.5 billion.
Alameda invested a total of four unique amounts of funds in the cryptocurrency miner. In August this year, it made an investment of around $100 million in the miner. It made an initial investment of $550 million in January, followed by additional investments of $250 million in February and April.
It is interesting to note that the news of Alameda’s investment in Bitcoin mining came just hours after it was revealed that the venture arm had helped bail out FTX the previous year.
The venture capital business contributed up to one billion dollars to FTX’s operations. This happened as a result of the exchange’s infrastructure not being able to protect it from the influence that a client had on a token.
Going forward, when Genesis was at its peak, trading assets totaled around $5 billion. According to the dashboard provided by Arkham Intelligence, the value of the company’s trading assets was around $238 million at the time this article was written.
Given the fall in the price of Bitcoin, skyrocketing energy prices and increased rivalry among miners, the business of Bitcoin mining moved from being one of the most profitable corners of the crypto world to being one of the most distressed sectors in a very short time.
With a crucial mining revenue gauge hitting record lows, some of the industry’s most prominent mining companies are on the brink of bankruptcy.
Genesis Digital began an aggressive growth strategy across the US after receiving the funds. As a result of the company’s success in securing more than 700 megawatts of electricity for its mining operations in Texas, South Carolina and North Carolina during the first half of 2022, the business has become one of the most important Bitcoin miners in the United States.
