Credits for sale – After having published information relating to its financial situation, BlockFi is moving forward in its bankruptcy proceedings with an upcoming sale of $160 million in loans. If some of these loans are bad, the most opportunistic could be interested in the mining machines that guarantee these loans.
BlockFi sells loans backed by mining hardware
Citing two sources familiar with the matter, the January 23 Bloomberg article indicates that BlockFi is considering sell $160 million in loansguaranteed by approximately 68,000 mining machinery. Some of these loans would be linked to borrowers who have already defaulted, and would be under-collateralized, given the fall in the price of this equipment.
According to January 24 data from Hashrate index, the price index for ASICs generating less than 38 joules/th and the index for those producing between 38 and 68 joules/th have dropped about 85% over a year, to the day. Over the same period, the price index of ASICs generating more than 68 joules/th recorded a drop of nearly 82%.
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Another way to seize the opportunities linked to Bitcoin?
BlockFi launched the tender for these loans last year, and buyers have until January 24 to submit their proposals. What are BlockFi’s chances of finding a buyer for these loans, some of which are uncertain about repayment?
In October, Grayscale’s new entity, the Grayscale Digital Infrastructure Opportunities (GDIO), launched its new product for investors who want seize the opportunities that the crypto winter offers in the mining sector.
GDAO funds are used to buy mining equipment that players in the sector, encountering difficulties, sell at low prices. This equipment will be used to mine Bitcoin (BTC)which will be resold to generate income, to be redistributed to investors.
Theoretically, BlockFi’s loans could therefore find takers with entities such as the GDIO, which see these bear markets as an opportunity to acquire, through various means, mining equipment at bargain prices.
Furthermore, the recent bitcoin price increaseswhich won back not only the $20,000 but also the $23,000, is another factor to consider, when determining the likelihood of BlockFi finding a buyer for its crypto loans secured by mining machines.
A renewed optimism on an upcoming bull rally in the short term could push entities, who want to use this equipment to mine Bitcoin for a profit, to submit an offer.
BlockFi therefore wants to bail out its cash by selling $160 million in loans. Entities eyeing the mining machines guaranteeing these loans or debt repurchase companies could respond to the company’s call for tenders.
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