SBF denies that FTX is looking at distressed crypto mining companies

by · July 4, 2022

Sam Bankman-Fried, the founder of the crypto exchange FTX, has calmed the speculation that the company is investigating acquisitions of distressed crypto mining companies, clarifying on Twitter on Saturday that they “do not really look into the room”.

“Really not sure why the meme about FTX and mining companies is spreading, the actual quote was that we * do not * really look into space,” Bankman-Fried clarified on Twitter on Saturday.

Speculation that the company was looking for mining companies came from an interview with Bloomberg on Friday, after the FTX founder said he did not want to rule out the possibility of a “convincing opportunity” in the mining industry, saying:

“It could be a really compelling opportunity for us – I definitely do not want to ignore that opportunity.”

However, the quote seems to have been taken out of context, which forces SBF to emphasize that the company “does not look specifically at miners”, but is “happy to have conversations” with mining companies.

Bankman-Fried also stated during the interview that crypto miners did not fit into the company’s core strategy and that he did not see any synergy from an acquisition standpoint:

“I see no particular reason why we need to have, you know, an integration with a crypto miner.”

“From a strategic perspective, there is no particular obvious synergy necessarily from an acquisition point of view,” he added.

Mining loans under stress

Bankman-Fried was asked if he looked at mining companies in the middle of a declining crypto market that has seen Bitcoin mining revenues fall sharply this year.

At the same time, the Russian invasion of Ukraine has also caused energy costs to skyrocket – which has caused a double impact on miners, small and large.

Mining profitability, which is a measure of daily dollars per terahash per second, has reached the lowest levels not seen since October 2020, according to Bitinfocharts. At the time of writing, Bitcoin extraction profitability is $ 0.0956 per day for 1Th / s, down 80% from the 2021 high of $ 0.464.

A report by Bloomberg on June 24 revealed that there was as much as $ 4 billion in Bitcoin mining loans, with an increasing number now under water as the prices of Bitcoin and mining rigs have fallen.

Related: Bitcoin Miner Mawson exposes all major capital expenditures until market conditions return to normal

Last week, the Cointelegraph reported that Bitcoin (BTC) mining revenues have reflected the lowest year not seen since mid-2021, with Bitcoin mining revenues falling to $ 14.40 million on June 17.

Data from Arcane Research in June found that the declining profitability of mining has forced public miners to start liquidating their holdings. It revealed that several of these companies sold 100% of their BTC production in May – probably to cover operating costs and loan repayments.