Binance launches $500 million fund to provide loans to Bitcoin miners

Binance launches $500 million fund to provide loans to Bitcoin miners

Blockchain Featured Technology
October 14, 2022 by Kofi Ahmed
106
Binance has launched a $500 million fund to provide loans to Bitcoin miners struggling to cope with difficult crypto-market conditions.
Binance launches $500 million fund to provide loans to Bitcoin miners

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  • Binance has launched a $500 million fund to provide loans to Bitcoin miners.
  • The initiative comes as Bitcoin miners struggle to cope with Crypto Winter.

Binance Pool, the company’s mining service, will provide loans for both private and publicly-listed Bitcoin miners — who will need to pledge security, in the form of physical or digital assets, to obtain loans with a duration of 18-24 months. Binance will charge interest rates between 5% and 10%.

The initiative comes as Bitcoin miners experienced a tough few months while the price of bitcoin declined. With low bitcoin prices, miners’ revenues have declined sharply — with Compute North even filing for bankruptcy.

Bitcoin miners’ revenue fell 16.2% to about $550.5 million last month — marking its fifth decline in the last six months, and the lowest total since November 2020, according to data from The Block Research.

Binance is not the only firm that is looking to support the crypto-mining industry. Last month, Chinese crypto billionaire Jihan Wu, the founder of Bitmain, set up a $250 million fund to buy distressed assets from Bitcoin miners. Wu’s Bitdeer Technologies Holding Co. plans to invest $50 million of its own money, with Wu then seeking to raise an additional $200 million from external investors.

Also last month, DeFi platform Maple Finance launched a $300 million lending pool for Bitcoin miners. The platform will charge interest rates of around 15%-20%, and provide loans that will have a duration of 12-18 months.

Earlier this month, crypto asset manager Grayscale formed a new entity named Grayscale Digital Infrastructure Opportunities LLC to invest in Bitcoin mining hardware. The entity plans to purchase mining rigs and hopes to profit by selling the bitcoins earned in the process.

Source: TheBlock

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