Troubled miner gives 26,000 rigs back to clear debt

Stronghold Digital Mining (SDIG) is a Bitcoin mining company based in the United States. announced Tuesday that it will be raising its outstanding debt and restructuring its financial operations.

The company has reached an agreement with New York Digital Investment Group (NYDIG) to release 26,000 of its mining equipment, of which 18,700 are still in operation. Stronghold’s $67.4m in debt will be cleared and more liquidity will result from the sale. The company had $47million in liquidity prior to the agreement.

Stronghold will return 26,000 rigs with a total hashrate of 2.5 EH/s. Their operational fleet will then be approximately 16,000 miners. The overall hash rate capacity will exceed 1.4 EH/s, with a total power draw between 50 and 55 megawatts.

The current problems for miners are due to the crypto market crash. The July 2015 Bitcoin ( BTC ) mining revenue fell to an all-time low of nearly $15 million. Other mining operations such as Compass Mining were also experiencing financial hardships around this time.

The need for major sales has resulted in Bitcoin miners earning 27% less over the last three months.

Insiders in the industry refer to the bear markets as a moment in crypto. It will allow others to restructure while eliminating operations that are not long-term sustainable.

Related: What is the best bear market strategy? Fintech CEO: “Relentless optimism about the future”

Stronghold’s expansion and restructuring are also accompanied by an agreement with WhiteHawk that adds $20 million to the available borrowing. According to the official statement, the company “opportunistically” will use the capital to buy new miners.

Greg Beard, CEO and co-chairman of Stronghold, stated that the restructuring will result in “significantly increased liquidity and flexibility to use capital opportunistically in an approach that creates equity value through cycles on the Bitcoin and power markets.”

Restructuring could be a step in the right direction, as experts believe there is still long-term viability in cryptomining despite the sell-offs. Mining revenue saw a dramatic turnaround after reaching its lowest point in July. In August, it increased by 68.6%.

A New York judge recently approved a request by the Celsius Network for BTC mining to be included in its refinancing efforts after bankruptcy.

Opinion writer on 7trade7