Australian Crypto Firm Shuts Off Miners
The downside of crypto winters is that they affect every part of the industry. The loss of the market value of tokens tends to have a ripple effect on all sorts of projects in the crypto space. These include exchanges, analytics firms, and much more.
One of the companies feeling this crunch is Iris Energy, an Australian cryptocurrency firm. As per a regulatory filing dated November 22, 2022, the company has opted to turn off its crypto miners. The reason for this is cited as adverse effects of the ongoing crypto winter as well as increased energy costs.
Iris Energy in Murky Waters
It should be noted that the mining hardware that was referenced in the filing was part of collateral on a $107.8 million loan taken by the company. As per the filing, the machines were bringing in about $2 million a month in profit. While that figure in itself is impressive, it represented only a fraction of the $7 million that the company needed to fulfil its debt obligation. The company is also battling increased energy costs as its 2022 energy expenditure is tallied at $6.6 million, which is a significant jump from the $1.6 million it spent last year.
In response to this situation, the company has announced a number of measures. More specifically, it will be bringing down its hash power to 3.6 exahashes per second (EH/s). But all hope is not lost yet as the company is looking to gain some advantage from its current deal with Bitmain, a crypto mining hardware producer.
$75 million has already been made in prepayments to the company and Iris Energy wants to take advantage of this to increase its mining capabilities. The crypto winter, as many know, tends to last months and the company’s strategy appears to be increasing its output even if costs remain high.
Major cryptos like Bitcoin have seen a slump in the last few months, with up to an 80% decline since its all-time high of around $70,000. Naturally, this reduction in market value means that the tokens being mined are worth less. This has been reflected in the value of publicly-traded crypto companies like Iris Energy, which has seen its shares decline by around 90%.
But despite the situation, it has not been all doom and gloom. Iris Energy reported an increase in its operating revenues for the third quarter. Compared to the $10.4 million reported in the second quarter, the company saw $16.2 million in the third.
Surviving the Winter
The current situation with Iris Energy highlights a few things about the crypto winter. First, that it has affected crypto firms across the board. Additionally, it shows that many firms are bracing for impact and intend to ride out the winter.
In the case of Iris Energy, this involves increasing output and for other companies, survival measures might be different. All in all, stakeholders can only hope to come out on the other side of this winter in good shape.