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Iris Energy Plans To Remove Mining Equipment

Iris Energy, a Bitcoin mining company based in Australia, is the latest business to suffer from the pressure brought on by the current bear market for cryptocurrencies. The company has lost a significant portion of its mining capacity as a result of its default on a loan. According to a statement that the company submitted to the United States Securities and Exchange Commission on November 21, it was revealed that as of November 18, it had disconnected its hardware that was being used as collateral in a loan for $107.8 million.

According to the statement made by the company, the divisions “generate insufficient cash flow to meet their respective debt financing commitments.” Although the enterprise has a monthly Bitcoin gross profit of around $2 million, it is unable to satisfy its $7 million monthly debt commitments.

Iris has now decreased its capability for mining by about 3.6 EH/s, which is measured in exahashes per second. It was said that there is still a capacity of around 2.4 EH/s, which consists of 1.1 EH/s of gear that is operational and 1.4 EH/s of rigs that are either en route or waiting to be deployed.

The firm has indicated that its “data centre capacity and development pipeline are untouched by the recent events” and that it would continue to investigate options to make use of its capacity. Iris is also considering the possibility of “utilising $75 million of prepayments previously paid to Bitmain in respect of an extra 7.5 EH/s of contracted miners for future self-mining.” This is one of the ways in which the company may increase its own mining capacity.

The company received a notice of default for $103 million earlier this month. The notification was served. Iris Energy mostly manages bitcoin mining operations in Canada that are powered entirely by renewable energy sources. After electrifying its facilities in Canada, the company more than quadrupled its hash rate at the beginning of August.

Iris Energy stock (IREN) lost 18% of its value during the day and was last seen trading at $1.65 in after-hours action. On November 21, it reached a new all-time low, falling 94% from its all-time high of $24.8, which it reached when it first started trading in November 2021.

Miners of Bitcoin are presently facing a triple whammy, as high hash rates and difficulty, high energy expenses, and low Bitcoin prices all combine to make mining unprofitable. As a result of this, many of them are either turning off their gear or beginning the process of selling the asset. Charles Edwards, who started the Capriole Fund, noticed on November 21 that the rate of selling by miners was the fastest it had been in over seven years.

“If pricing doesn’t move up soon, we are going to see a lot of Bitcoin miners go out of business,” he continued. “We are going to see a lot of bitcoin miners go out of business.” It is quite unlikely that there will be a price hike in the near future. According to CoinGecko, the price of bitcoin fell to a new bear cycle low of $15,649 during the early hours of Asian trade on Tuesday, November 22.

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Reporter
Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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