• Greenidge Generation, a bitcoin miner operating in New York, has reached a restructuring agreement with its lender NYDIG worth $74.4 million.
• NYDIG will purchase 2.8 EH/s of Greenidge’s bitcoin miners, which will eliminate $57-$68 million of debt.
• The cash burn rate for October and November 2022 was approximately $8 million, of which $5.5 million per month was associated with debt payments to NYDIG.
Greenidge Generation, a bitcoin miner based in New York, has recently come to a restructuring agreement with its lender NYDIG for a total of $74.4 million. This deal is expected to help the company remain in operation despite the difficult times faced by many miners in the current market.
Under the agreement, NYDIG will purchase 2.8 exahash per second (EH/s) of Greenidge’s miners, which Greenidge will host for NYDIG. This will reduce the debt by $57-$68 million, leaving Greenidge with approximately 1.8 EH/s of its own miners. The remaining unencumbered assets of Greenidge must be pledged to secure the remainder of the loan.
In order to assess the impact of this agreement, it is important to look at the cash burn rate that Greenidge experienced in October and November 2022. During those two months, the company burned through around $8 million, of which $5.5 million was associated with payments to NYDIG.
Greenidge had previously raised the alarm about its financial standing, warning that it would run out of money by March 2023 unless it took immediate action. This restructuring agreement is a step in the right direction that will allow the company to remain in operation, but the future of the mining sector remains uncertain.
The current market environment has been difficult for many miners, as the price of bitcoin has plummeted while the hash rate continues to increase. This means miners are mining high and selling low, which is taking a toll on their profits. It is hoped that this restructuring agreement between Greenidge and NYDIG will provide a much-needed lifeline for the mining firm and help it to remain in operation.