According to a Bloomberg report, Bitmain Technologies Ltd., one of the largest manufacturers for Bitcoin mining equipment, and Antpool are partnering with Antalpha to provide a lifeline for Bitcoin mining companies during the current downtrend in the market. Loans for struggling mining companies will be low-cost and may be used to recoup equipment debt or to subsidize energy costs.
Antpool is the second-largest mining pool in the world and the mining spinoff of Bitmain. Antalpha, an industry financier, will receive proprietary data from Bitmain and Antpool in order to assess financial risks associated with businesses seeking low-interest loans to pay back equipment loans and reduce borrowing costs.
Additionally, Antalpha will provide Bitcoin miners with a revolving line of credit that may only be used for electricity costs. According to Max Liao, managing director of business development at Antalpha, the low end of these loans has a rate of 6.6%, which is less than half the industry average, while the high end is capped at a maximum of 8.8%.
Liao explains to Bloomberg that “We are taking their biggest cash outflows, electricity cost, and helping them to reduce that burden.” Liao adds that the general consensus throughout the industry is that Bitcoin’s bear market will eventually end soon and the goal for Antalpha’s partnership with Bitmain and Antpool is to ensure that “everybody makes it through the winter.”
Under market pressures, mining companies like Core Scientific and Bitfarms have revealed that it was necessary to sell large portions of their Bitcoin holdings in order to keep operations running. Lenders and even exchanges have fallen victim to liquidity issues, which has increased panic throughout the industry.
Antalpha stated that it will not impose margin-calls on certain loans with businesses by allowing mining rigs to be held as collateral. The company will also allow Bitcoin miners to defer payments if current market conditions continue to be volatile.