Miner Weekly: Marathon's energized, and NYDIG is taking over machines

Nov 05, 2022

Secured bitcoin miners change hands as loan defaults loom

It’s yet another busy week in mining. Following Core Scientific’s news on suspending interest payments last week, Iris Energy, Stronghold Digital, and Argo Blockchain also dropped updates on the status of their financing. One interesting thing that these companies have in common is that they all borrowed loans from NYDIG, which is now in a position to take over tens of thousands of collateralized mining machines.

As we detailed in last week’s issue, Core had $48M in loans payable as of June 30 to NYDIG, secured by bitcoin mining machines – the quantity is unknown but surely is in the thousands. The potential default could see those collaterals handed over to the lender.

Stronghold said this week that it fully returned 26,200 machines to NYDIG to extinguish debt liabilities. And below is a Twitter thread about Iris Energy’s potential default on two equipment financing loans, of which at least 19,800 S19j Pro machines were pledged as collateral.

BlocksBridge Consulting @BlocksBridge_

@irisenergyco is the latest #bitcoinmining pubco that warns of a potential default on two equipment financing loans secured by 3.6 EH/s. At least one of the lenders appears to be @NYDIG, which could take over some 20k S19j Pros. Will it dump on the ASIC market? 🧵 👇

It’ll be interesting to see what the lender plans to do with the returned machines. Energizing them to self-mine has potential upsides if they can secure good hosting contracts. The market value of machines has declined so much that liquidating them may not make up for the loan principles anyway. But it appears NYDIG has been going through some tough times internally as well, reportedly laying off 30% of its staff.

Now some bright news: Marathon’s site issues appear to be finally behind it. The firm recently energized 32,000 ASIC miners and had a record production in October with 615 BTC. That translates to 5.38 EH/s in Realized Hashrate after notable growth since the summer bottom.

Meanwhile, with recent moves on acquiring sites and miners, CleanSpark achieved 4.65 EH/s in Realized Hashrate for October, surpassing Riot, although Riot has a larger installed hashrate. Bitcoin's average hashrate grew by 34 EH/s last month and ~14% of that growth came from the three largest public mining companies.