Sphere 3D is the latest bitcoin mining firm to try to cut capital expenditures amid the crypto bear market.Read MoreCoinDesk
Bitcoin miner Sphere 3D (ANY) has downsized its purchase of mining machines from BitFuFu, the latest in a series of moves in an industry where companies are struggling to keep their balance sheets healthy.
Bitcoin miners have had a rough ride in recent months amid falling crypto prices and soaring energy costs. Many have started selling off assets such as mining machines and restructuring their debt. September saw the first Chapter 11 bankruptcy from a major mining firm, Compute North.
Under the restructured deal, Sphere 3D has applied the $106.9 million in deposits it has already paid to BitFuFu to date toward receiving 1.7 exahash/second (EH/s) of machines in the near future, and is relieved of the obligation to buy another 3.9 EH/s of machines, according to a Thursday press release.
The original agreement, signed in September 2021, called for Sphere 3D to buy 60,000 Bitmain Antminer S19j Pros. Since then, however, the prices of mining machines have dropped by more than 70%, data compiled by mining services firm Luxor shows.
“The contract with BitFuFu was signed in late 2021 at the height of the Bitcoin market as a fixed price contract with no allowances for market price adjustments,” and it was “critical” that the firm was extricated from the contract, said Patricia Trompeter, Sphere 3D’s CEO, in the press release.
The delivery of the machines has been “repeatedly delayed” due to BitFuFu’s operational issues, Sphere 3D said on Thursday. The restructuring accelerates the delivery timeline, with machines now set to be delivered in November and installed in December.
Sphere 3D stock was up around 5% on the Nasdaq on Thursday following the news.
Several large miners have recently renegotiated their contracts for mining rigs, including Marathon Digital Holdings (MARA) and Core Scientific (CORZ).
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