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CoinShares expert Matthew Kimmell believes that the sale of mining equipment to a subsidiary of Celsius can lead to a drop in prices for miners and increase negative pressure on the market.
Analyst at research firm CoinShares Matthew Kimmell (Matthew Kimmell) joined experts concerned that the mining subsidiary of troubled cryptocurrency lender Celsius – Celsius Mining – has applied for protection from creditors.
“The sale of Celsius Mining miners will increase the pressure on falling prices for cryptocurrency mining equipment,” Kimmell said.
Industry analysts have suggested that Celsius Mining could sell about 120,000 miners to raise cash. This can reduce the price of equipment. If the value of miners and bitcoin drops sharply, the cryptocurrency market may collapse.
Already, some of the most popular models of miners have fallen by 50% since the last bull rally. At the same time, Kimmell believes that Celsius will go to the end to repay the debts.
“It seems that Celsius will try to keep at least part of the activities of Celsius Mining after the restructuring of the company in order to receive bitcoins and repay some of its obligations,” the analyst said.
The expert noted that although the price of bitcoin has fallen by almost 70% compared to the November maximum, and many miners are experiencing difficulties, equipment for mining cryptocurrencies may be in demand if Celsius decides to get rid of it.
“This will enable successful miners to expand depending on their capabilities, the cost of electricity and the efficiency of Celsius equipment,” he said.
Ethan Vera, chief operating officer of cryptocurrency mining service provider Luxor Technologies, confirmed that the cost of mining equipment is falling.
“Our sales team usually sees 10-15% market slippage if the cost of equipment drops rapidly. For miners, this is likely to mean a loss of 60-70% of their initial investment,” Vera said.
Recall that last week Celsius filed an application for “immediate” bankruptcy in the court of the Southern District of New York, according to the provisions of Chapter 11 of the US Bankruptcy Code.
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