Cryptocurrency lending startup BlockFi announced that it has received court approval to sell off hundreds of millions of dollars’ worth of Bitcoin (BTC) and Ethereum (ETH) mining equipment. This remarkable decision marks a significant step forward for the company, granting it the authorization it needs to liquidate its cryptocurrency mining holdings.
BlockFi’s crypto mining operation was initially launched in 2019, when the company secured over $4 million in seed funding. This considerable power gave the company the ability to mine both Bitcoin and Ethereum in volume, while also providing additional revenue streams.
However, the increasing difficulty of cryptocurrency mining and the price of electricity necessitated a pivot within BlockFi. Faced with the prospect of mounting losses, BlockFi sought court approval to liquidate its crypto mining holdings in order to focus on its core lending business.
In their request to the court, BlockFi argued that “the costs of continued mining operations” were no longer justified by the returns on investment, given the current market conditions. Furthermore, BlockFi explained that the large quantity of mining hardware held by the company would be more properly redeployed with another entity.
After evaluating the situation, the court decided to grant BlockFi permission to move forward with the sale. This decision marks an important milestone for the company, allowing it to extract additional value from its mining equipment before ultimately moving on to pursue other ventures.
The sale of BlockFi’s mining equipment reflects the continued challenges faced by the cryptocurrency mining sector. Despite the lucrative returns it can potentially bring, cryptocurrency mining is increasingly becoming unprofitable due to the increasing difficulty of mining operations and the price of electricity. Therefore, companies such as BlockFi must weigh the risks and rewards of mining carefully in order to make sensible investments.