Sam Bankman-Fried, the founder of crypto exchange FTX, has calmed speculation that the company is exploring acquisitions of troubled crypto mining companies, clarifying that Twitter on Saturday that they “are not really looking into space.”
“Not really sure why the meme is spreading about FTX and mining companies, the real quote was that we are not really looking into space,” Bankman-Fried clarified on Twitter on July 2.
The speculation that the company was looking for mining firms came from an interview with Bloomberg on July 1, when the FTX founder said he did not want to discount the prospect of a “compelling opportunity” in the mining industry, stating was:
“A really compelling opportunity may be coming for us – I certainly don’t want to discount that possibility.”
However, the quote appears to have been taken out of context, forcing the SBF to clarify that the firm is “not looking specifically at miners” but is happy to have “negotiations” with mining companies. “.
To be clear I roughly said “Meh not specifically looking at miners, but of course, happy to negotiate with any company” https://t.co/liHKS2y06Z— SBF (@SBF_FTX) 1 July 2022
Bankman-Fried also said during the interview that crypto miners did not fit the company’s original strategy and did not see any synergy from an acquisition perspective.
“I don’t see any particular reason we need, you know, integration with a crypto miner.”
“From a strategic standpoint, there’s not necessarily a particularly clear synergy from an acquisition standpoint,” he said.
Mining Loans Under Pressure
Bankman-Fried was asked if he was looking for mining firms amid a falling crypto market, which has seen a sharp drop in bitcoin mining revenues this year.
At the same time, the Russian invasion of Ukraine has also caused skyrocketing energy costs – with a double effect on miners small and large.
According to Bitinfocharts, mining profitability, which is a measure of daily dollars per terahash per second, has not seen a decline since October 2020. At the time of writing, bitcoin mining profitability stands at $0.0956 per day for 1Th/s, which is down 80% from the 2021 high of $0.464.
A Bloomberg report on June 24 revealed that bitcoin had as much as $4 billion in mining loans, with increasing numbers now underwater due to a drop in bitcoin and mining rig prices.
RELATED: Bitcoin Miner Mawson Will Postpone All Major Capital Expenses Until Market Conditions Normalize
Last week, Cointelegraph reported that bitcoin (BTC) mining revenues are not showing year lows since mid-2021, with bitcoin mining revenues falling to $14.40 million on June 17th.
Data from Arcane Research in June found that the deteriorating profitability of mining has forced public miners to liquidate their holdings. It turns out that many of these firms sold 100% of their BTC production in May – likely to cover operating costs and loan repayments.