To pay off a $100 million debt from Galaxy Digital, Bitfarms forfeits 3,000 BTC

Published on:

Last Updated on June 23, 2022 by Bitfinsider

With the sale of 3,000 BTC over the past week, bitcoin miner Bitfarms paid off a $100 million debt backed by bitcoin while also securing a new $37 million loan insured by mining machines.

The business initially claimed that it had sold 1,500 of its bitcoin holdings to reduce the loan by $34 million, bringing it down to $66 million. The total amount owing was reduced to $38 million when it added an additional 1,500, according to a statement released on Tuesday.

This transaction’s precise nature is unknown as Bitfarms has rejected any request for comments.

Despite the drop in bitcoin prices recently, Bitfarms’ decision to sell a portion of its daily production is a sharp turn away from its former tactic of hanging onto its mined bitcoins. The business mined 3,453 BTC in total in 2021. Bitcoin was worth about $21,500 at the time of publication.

According to Chief Financial Officer (CFO) Jeff Lucas, the extraordinary market volatility was the main consideration for Bitfarms to continue taking steps to improve liquidity, reduce leverage, and strengthen their balance sheet. “While we remain bullish on long-term BTC price appreciation, this strategic change enables us to focus on our top priorities of maintaining our world-class mining operations and continuing to grow our business in anticipation of improved mining economics,” the company said. The business considers this strategy to be the most effective and economical course of action in the current market climate.

“In addition to lowering our interest expense, this $34 million reduction in borrowing gives us the ability to utilize more of our BTC holdings strategy as it frees up BTC that would otherwise be used to collateralize this credit facility,” Lucas added.

The loan was collateralized at 143 percent of the borrowed amount and secured with cryptocurrency-focused trading and investment firm Galaxy. According to the loan arrangement, Bitfarms must provide additional security whenever the value of the existing collateral drops below 133 percent.

“A substantial decrease in Bitcoin price may result in the Company being unable to meet the minimum Bitcoin collateral requirements, which could result in the disposition of the Company’s Bitcoin pledged as collateral by the Facility Lender, or repayment of the facility in fiat currency on demand,” according to a recent report by the company.

Bitfarms declared having 6,075 BTC as of May 31. With the full 3,000 BTC sold plus the additional June production at an average rate of 14 BTC per day, their holdings are currently at 3,349 BTC.

These holdings might be worth approximately $72 million at the current price of Bitcoin, which is over the 143 percent of the remaining $38 million borrowed (or about $54.34 million).

At the time of writing, shares of Bitfarm were up 8.20 percent on Nasdaq and 6.90 percent on the Toronto Stock Exchange.

Opportunities for Expansion

Meanwhile, Bitfarms reached an agreement with NYDIG for a $37 million loan with a 12 percent interest rate, which will be secured by mining equipment at some of the company’s sites. In July and October, additional funding might be available.

According to Lucas, the business is now “better positioned” to take advantage of any acquisition or growth prospects brought on by the present market situation.

“We have proactively taken non-dilutive strategic actions to increase our financial liquidity and flexibility during this period of macroeconomic crypto challenges,” said Lucas.


Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked.

To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor


Are you new to investing and would like to find out more about investments and cryptocurrency? If you know nothing about a topic and want to become an expert on it, one fool proof way to start is to read good books about the topic.

If you read one book about a topic, you will be able to share knowledge or discuss the topic at an elementary level with almost everyone.

Read three books and you will likely know more than the majority of people and will be able to discuss the topic at an intermediate to expert level.

  1. The Intelligent Investor by Benjamin Graham
  2. Crypto Investing Guide: How to Invest in Bitcoin, DeFi, NFTs and More by Ian Balina
  3. The Basics of Bitcoins and Blockchains: An Introduction to Cryptocurrencies and the Technology That Powers Them by Antony Lewis

Disclaimer: Above are some affiliate links and we may collect a share of sales or other compensation from the links on this page.

Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.


Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: Above are some affiliate links and we may collect a share of sales or other compensation from the links on this page.
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

Related