Iris Energy Suffers From Squeeze Of Crypto Bear Market
Iris Energy, the Australian Bitcoin mining, firm is the latest to suffer from the squeeze of the crypto bear market, losing a significant chunk of its mining power after defaulting on a loan.
It has been reported that a filing by the firm to the US Securities and Exchange Commission on November 21 revealed that it has unplugged its hardware used as collateral in a $107.8 million loan as of November 18. The units “produce insufficient cash flow to service their respective debt financing obligations,” the firm noted. The operation generates around $2 million in Bitcoin gross profit per month but cannot cover the $7 million in debt obligations.
However, Iris has now reduced its capacity by around 3.6 EH/s (exahashes per second) of mining power. It stated that capacity remains at around 2.4 EH/s which includes 1.1 EH/s of hardware in operation and 1.4 EH/s of rigs in transit or pending deployment.
The report said that the company stated that its “data center capacity and development pipeline are unaffected by the recent events,” and it will continue to explore opportunities to utilize its capacity. Iris is also looking at 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.”
Likewise, earlier this month, the firm was served with a default notice for $103 million. Iris Energy primarily operates Canadian BTC mining centers that run on fully renewable energy. In early August, the firm doubled its hash rate after energizing facilities in Canada.
Thus, Iris Energy stock slumped 18% on the day to trade at $1.65 in after-hours trading. It hit an all-time low on November 21, down 94% from its all-time high of $24.8 when it first traded in November 2021.