Bitcoin Miner Stronghold Sells Mining Machines to Cut $67.4 Million in Debt

The wide-ranging consequences of May’s devastating crypto crash are still being unravelled.

In a quarterly report published yesterday, Bitcoin mining company Fast disclosed that it had reached an agreement with lender New York Digital Investment Group (NYDIG) and another participating broker, to return about 26,200 mining machines in exchange for canceling $67.4 million in debt.

In addition, Stronghold yesterday received a commitment from lender WhiteHawk Capital to restructure and expand its current equipment financing.ements, in a move that will give the Bitcoin miner up to $20 million in additional borrowing capacity.

In total, these agreements – combined with a restructuring of convertible notes – will reduce Stronghold’s debt by $79 million.

That’s 55% of the company’s current debt; $64 million will still be outstanding.

Bitcoin miners prepare for bear market

The move comes as crypto companies continue to take stock of the crippling impact of May and June’s crash, which in many respects is still lingering.

Although Bitcoin temporarily restored to $25,000 recently, the leading cryptocurrency is still down 65% from its November 2021 peak of $69,044.77. Bitcoin is currently at $23,821.80, according to data from CoinMarketCap.

The massive decline has devastated Bitcoin miners like Stronghold, who pay huge overhead equipment and energy costs to produce the blue-chip cryptocurrency.

To survive the crash, other Bitcoin miners have stepped in sell their Bitcoin reservesa surprising move for some of the industry’s most hardened HODLers.

According to a report from Arcane Research, Bitcoin miners sold nearly 15,000 BTC in June, a whopping 400% of their Bitcoin output. This figure was reduced in July, down to 6,200 BTC.

Still, 158% of Bitcoin is produced by these miners, an indication of serious financial problems.

However, as opposed to selling its Bitcoin supplies, Stronghold reduced its debt by selling mining equipment. The company insists that this will not affect its long-term BTC production capacity.

Greg Beard, Stronghold’s co-chairman and CEO, said in a statement that the company’s current position “provides additional availability for us to patiently and opportunistically acquire Bitcoin miners at currently depressed prices.”

He also alluded to alternative revenue streams that could keep the company generating revenue in the meantime.

“Our power generation capacity remains unchanged, so while our Bitcoin mining fleet has been reduced in the short term, we have significantly more open exposure to strong power markets,” Beard said. “Forward prices suggest that selling power is an attractive alternative to Bitcoin mining, regardless of the size of our mining fleet.”

Stronghold’s stock fell 17.55% yesterday after revealing the sale of mining equipment. The stock has fallen a whopping 75.76% so far this year, and is trading at $3.19 at the time of writing.