Binance on October 14, announced a new lending project to support the crypto mining sector from the bear market.
The following development comes after Jihan Wu, Bitmain founder, announced the creation of a $250 million fund to buy damaged assets from mining companies.
Wu is currently in charge of Bitdeer Technologies, a company that makes bitcoin mining equipment, which initially plans to invest $50 million. The firm intends to obtain the final $200 million from other investors.
The $500 million project was started by Binance Pool and aims to offer secure debt credit facilities to both the general public and private top BTC mining and digital asset infrastructure firms.
Binance Pool, one of the top crypto mining pools in the world, has a responsibility to maintain a healthy ecosystem for digital assets. In light of present market situation, Binance Pool is launching a $500 million financing operation to help cryptocurrency miners and providers of digital infrastructure.
As per the announcement, the miners would have to provide security for the loan for a period of 18 to 24 months, in the form of either digital or physical assets.
The interest rates are between 5% to 10%. Additionally, Binance stated intentions to launch cloud mining products and is seeking providers.
Due to falling Bitcoin price and rising energy expenses, miners are under a huge pressure. The mining difficulty rose by almost 13% in only two weeks, hitting a new record.
Miner are selling their Bitcoin all year to balance their declining profits. In some circumstances, the miners had to sell more in a month than they had produced.
Many firms are struggling to cope up with the downturn in the crypto market. Compute North is one such company that recently filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of Texas.
Mining firms like Iris Energy sold $100 million shares, for financial gain. Contrarily, Compass Mining shut down its operations in Georgia. Due to the prolonged bear market, Poolin, one of the biggest Bitcoin mining pools, stopped withdrawals.
Businesses like Argo and CleanSpark, which borrowed millions on their mining equipment, saw significant losses month after month.
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