Iris Energy Switches Off Its Mining Hardware, Feels the Crypto Winter

<p> Iris Energy, an Australian-based cryptocurrency firm publicly listed on Wall Street (<a href=”https://www.financemagnates.com/tag/iris-energy/” target=”_blank”>NASDAQ:IREN</a>), has switched off a part of its mining hardware used as collateral in a $107.8 million loan. According to the <a href=”https://www.sec.gov/Archives/edgar/data/1878848/000114036122042419/ny20005141x6_6k.htm”>newest</a> regulatory filing at the US <a href=”https://www.financemagnates.com/terms/s/securities-and-exchange-commission-sec/” target=”_blank” id=”3718b4df-fc5f-479a-861e-f52759439c15_1″ class=”terms__main-term”>Securities and Exchange Commission (SEC</a>) from 21 November 2022, the company’s electricity costs increased by 312% over one year.</p><p class=”MsoNormal”>The secured miners owned by Non-Recourse SPV 2 and Non-Recourse SPV 3 produced insufficient cash flow. Their operations generated around $2 million in crypto profit monthly, which is significantly below the debt obligation of $7 million.</p><p class=”MsoNormal”>Iris Energy was forced to reduce its hash power to 3.6 exahashes per second (EH/s). However, the company intends to increase its mining potential. It wants to benefit from $75 million in prepayments made to Bitmain, a mining rigs manufacturer, as part of its contracted 7.5 EH/s machines for independent mining.</p><p class=”MsoNormal”>Moreover, the company announced some preliminary financial results for the third quarter of 2022. Operating revenues reached $16.2 million, which is a significant increase from $10.4 million reported in the previous quarter. However, as mentioned at the beginning, the company had to cover a substantial increase in electricity costs to $6.6 million from $.16 million reported in the same period last year.</p><p class=”MsoNormal”>A Growing List of Miners’ Problems</p><p class=”MsoNormal”>The Aussie cryptocurrency mining company is not the only firm whose operations have recently been hovering on a thin profitability line. The prolonged ‘cryptocurrency winter’, a situation where major assets move in a sideways trend at multi-month lows for an extended period, visibly cut potential profit.</p><p class=”MsoNormal”><a href=”https://www.financemagnates.com/terms/b/bitcoin/” target=”_blank” id=”261088a9-0f41-4202-a73c-31f75ba6bd93_1″ class=”terms__secondary-term”>Bitcoin</a> has now lost 80% since its historic highs in 2021 when it cost nearly $70,000. Revenues and valuations of publicly traded mining companies on Wall Street are falling accordingly. </p><p class=”MsoNormal”>Iris Energy’s shares have slipped 90% this year alone, and its rival <a href=”https://www.financemagnates.com/cryptocurrency/canaan-feels-the-bitcoin-blues-net-income-down-90/”>Canaan</a> has lost 50%. The company reported its third-quarter figures in the first half of November, showing a 90% drop in net income.</p><p class=”MsoNormal”>On top of that, <a href=”https://www.financemagnates.com/cryptocurrency/hive-revenues-down-45-in-q3-despite-higher-btc-production/”>HIVE Blockchain Technologies Ltd.</a> and <a href=”https://www.financemagnates.com/cryptocurrency/hut-8-loss-deepens-despiite-higher-mining-rate/”>Hut 8 Mining Corp.</a> felt the ‘Bitcoin blues’ and reported a sharp decline in revenues despite increasing hash power and a total number of mined cryptos.</p><p class=”MsoNormal”>The daily profit of BTC miners is now $13 million, which is the lowest in more than two years. Bitcoin currently costs less than $17,000, and until it moves back higher, the condition of the mining industry will certainly not improve. </p>

This article was written by Damian Chmiel at www.financemagnates.com.