Bitcoin Miners Running Out of Time

Reading Time: 2 minutes
  • Bitcoin mining companies are taking steps to mitigate their losses
  • Iris Energy unplugged a large number of machines in order to help pay off $107.8 million in defaulted loans
  • Core Scientific revealed that a Q3 loss of $434 million, taking its losses to $1.7 billion for the year

Two mining companies have laid bare the stark realities of Bitcoin mining in the current market, which is currently unprofitable for many and costing some billions. Iris Energy revealed this week that it had been forced to turn off a large number of machines to reduce its losses, while mining giant Core Scientific revealed losses of over $1.7 billion this year as it stares down the barrel of bankruptcy.

Iris Energy Turns off Machines

In a Securities and Exchange Commission filing Monday, Iris said that it pulled the plug on mining machines it used as collateral for over $100 million in debt, having received a default notice from its lender. Iris was handed a default notice on about $107.8 million in loans it was securing through the devices, which are now offline.

Iris said the move will not impact its data center capacity and development pipeline, with the switch off freeing up about 90 megawatts of capacity, which the company said in the filing that it would seek to utilize elsewhere:

The group continues to explore opportunities to utilize its available data center capacity, recognizing the current scarcity of industry hosting data center capacity, and the prospect of utilizing $75 million of prepayments already made to Bitmain in respect of an additional 7.5 EH/s of contracted miners for further self-mining.

Iris had previously revealed that the value of Bitcoin compared to the cost of mining it were making the venture unprofitable, earning only about $2 million per month in gross profit compared to $7 million in debt obligations.

Core Scientific Confirms Annual Losses of $1.7 Billion

Things aren’t much better for Bitcoin’s biggest miner Core Scientific, which this week revealed annual losses to date of over $1.7 billion. Core Scientific was already known to be in a bad place financially, and this week’s quarterly filings showed a Q3 loss of $434 million.

This reversal in its fortunes has led to some creditors starting legal proceedings this month, alleging that the company failed to make or return payments.