Another crypto mining firm is in trouble. This time, the alleged victim is Greenidge Generation (GREE), which has hinted that it could file bankruptcy in the coming weeks if its present deal with NYDIG doesn’t work out.
Greenidge Generation Could Be the Next to Go
The company is struggling to restructure its nearly $75 million debt. By doing this, the company could avoid a long bankruptcy line that initially began last summer with firms like Celsius, though Greenidge is not out of the woods yet. Even if the plan goes through, the company is still required to garner at least $20 million in new funding before the end of 2023. This could prove challenging if the crypto space does not heal by then.
To say 2022 was a bad year for crypto would be a terrible understatement. The world’s biggest digital currency – bitcoin – fell by more than 70 percent from the all-time high of $68,000 per unit it achieved in November of 2021. By the time the year ended, the currency was trading in the high $16K range.
Several other leading tokens followed in the asset’s footsteps. The crypto space ultimately lost more than $2 trillion of its overall value and there were several companies that went under or were forced to file bankruptcy due to the weak sentiment surrounding the space.
Celsius is arguably the firm that started the trend. The company halted all withdrawals in the summer of 2022 and caused everyone to raise eyebrows when they suddenly couldn’t access their funds. From there, the company engaged in bankruptcy proceedings to protect itself against angry creditors and customers, all the while dealing with a very unstable market.
Other enterprises followed suit, including Three Arrows Capital, Voyager Digital, and then FTX, which appears to have engaged in various criminal acts including using traders’ assets to fund personal ventures such as buying luxury condominiums in the Bahamas for Sam Bankman-Fried – the head executive of the exchange – and other employees.
The company is now at the center of a huge scandal and Sam Bankman-Fried is out on bail while he awaits trial in California after spending time in a Bahamian jail cell.
You Can’t Just Make Money Mining
To try and survive for the next 12 months, Greenidge will no longer be hosting its own digital currency mining machines. Instead, it will play host to the machines of NYDIG. The company must also run completely on natural gas as a means of reducing its costs, and it must also sell energy produced in a natural gas plant and not just rely on crypto mining to make ends meet.
This is a huge change for a company that just last October and November, was driving through more than $8 million each month. Of that money, $5.5 million went to NYDIG payments.
