Binance has decided to establish a 500 million dollar fund to allow struggling miners to borrow from the platform for 5 to 10% interest. Indeed, 2022 is a very difficult year for Bitcoin (BTC) miners, who are sometimes forced to sell their BTC stock to survive.
Binance releases $500 million to miners
Binancethe world’s largest cryptocurrency exchange, having launched a $500 million fund to support struggling Bitcoin (BTC) miners.
Bitcoin (BTC) mining makes it possible to complete blocks on the blockchain of the same name. This is an extremely complex calculation method that allows miners their reward for their activity directly in the form of BTC. To learn more, we invite you to watch our Bitcoin mining explanation video.
Also, Binance will let miners who are currently facing financial difficulties borrow from the platform, with interest ranging from 5 to 10% under conditions not yet specified. According to the statement, these loans can be spread over a period of 18 to 24 months.
This financial boom will be accessible to private companies, but also to public companies, we can read:
“This project, the first of its kind for Binance Pool, was designed to provide secured debt financing services to blue chip public and private companies in bitcoin (BTC) mining and infrastructure and digital assets around the world. »
To be eligible for one of these loans provided by Binance, however, minors will have to provide guarantees with the platform in the form of mining equipment or directly in the form of cryptocurrencies.
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This initiative was implemented as a result of strong difficulties faced by Bitcoin miners, who are seeing their earnings directly affected by the fall in the price of the king of cryptocurrencies, which has been falling steadily since its all-time high (ATH) of $69,044 hit on November 10. The latter is now hovering between $18,000 and $24,000, and should last for a while.
As a result, the miners were able to see a significant decrease in their income, which forced some of them to sell their assets, so much so the amount of Bitcoins held by miners has not been this low since 2010.
Bitcoin miner monthly earnings from January 2017 to present
These difficulties, together with the rise in energy costs,. giants like Computh North filed for bankruptcy. In this specific case, the firm is protected under Chapter 11 of the bankruptcy law of the United States to repay its credits, which reach 500 million dollars.
Similarly, usone of the largest Bitcoin mining pools, had to reject some of the withdrawals requested by its customers in BTC and Ether (ETH) after a major liquidity problem due to too many simultaneous withdrawals.
Digital Marathon and Blockchain Riot, which is among the largest publicly traded mining companies in the world, sold more Bitcoin than they produced in the past month. This is in stark contrast to their results for the first 4 months of the year, when they only sold around 30% of their production.
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Sources: Binance press release, IntoTheBlock, The Block Data
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