Rhodium filed for Chapter 11 with debts of up to $100M and assets of up to $500M. The debtor-in-possession financing plan is offered by Galaxy Digital. Galaxy Digital offers Rhodium a $30M loan or 500 BTC with a 9.5%-14.5% interest.

Rhodium Enterprises, a Texas-based Bitcoin mining firm, has recently garnered significant attention following its Chapter 11 bankruptcy filing on August 24, 2024. With liabilities ranging between $50 million and $100 million, and assets valued between $100 million and $500 million, Rhodium’s financial struggles have highlighted the growing challenges within the cryptocurrency mining sector. Riot Platforms claims Rhodium owes it $26M At the heart of Rhodium’s financial distress is its strained relationship with its landlord and power supplier, Whinstone. This tension contributed to Rhodium defaulting on a $54 million loan in July, shortly before the company raised $78 million in additional lending. The strain has culminated in the filing of a lawsuit by rival mining firm Riot Platforms, which claims Rhodium owes over $26 million in unpaid fees. Texas approves debtor-in-possession financing plan for Rhodium Despite these setbacks, Rhodium has secured an unusual debtor-in-possession financing plan approved by a Texas court. This plan, offered by Galaxy Digital — a blockchain firm led by Mike Novogratz — provides Rhodium with a choice between a $30 million loan with a 14.5% annual interest rate or a 500 Bitcoin loan with a 9.5% interest rate. Notably, the Bitcoin miner has the option to repay the Bitcoin loan in US dollars, based on market prices at the time of repayment. The approval of this financing plan is particularly striking given the volatility of Bitcoin price, which adds a layer of uncertainty to Rhodium’s repayment obligations. Over the last month, Bitcoin has seen a nearly 11% decline, reflecting broader market instability. Rhodium’s struggles are not isolated; they are emblematic of the broader challenges facing the cryptocurrency mining industry. The recent Bitcoin halving has reduced mining rewards while rising electricity costs have eroded profit margins. As Rhodium endeavours to reorganize and recover, its journey underscores the precarious state of the crypto-mining sector in an increasingly volatile market.

Share this article

Categories

Markets

Tags

Bitcoin News

Bitcoin fell to lows of $57,700 on Coinbase as prices dipped during the US trading session. Analysts predict further weakness is likely, and here’s what they are saying

At the time of writing, Bitcoin (BTC) traded around $58,486 across major crypto exchanges. However, the digital asset’s price had touched lows of $57,700 on US-based crypto exchange Coinbase amid fresh selling pressure. Notably, before this latest dump, crypto analyst Miles Deutscher had shared an observation: the last few weeks have seen prices rise during Asian hours and dip during US trading hours.    “Asia bids, America dumps,” the analyst opined. 

Potential downside to $56k? CryptoQuant head of research Julio Moreno suggests the $56k area remains key. If the price falls below this, the analyst sees a further weakness. According to Moreno, Bitcoin’s market cycle indicator has flashed bearish again and BTC risks a deeper correction below the demand zone. “From a valuation perspective, if the price pierces $56K to the downside, risks of a larger correction increase,” the CryptoQuant analyst noted.

Could Bitcoin see $40K next? Altcoin Sherpa is outright bearish on BTC price. The crypto analyst shared a chart that suggests the dip is likely to extend to $40k. The last time Bitcoin traded at these levels was in January, when prices retreated from above $46k to revisit $39k. That’s before bulls saw BTC skyrocket amid the halving sentiment and spot Bitcoin exchange-traded funds approval to reach the all-time high above $73k. BTC price is down 12% in the past month and over -21% since its all-time high in March as of 1:30 pm ET on August 30, 2024.

What about BTC price in September? Market conditions and events can flip investor sentiment at any time. However, crypto analyst Ali Martinez suggests September has historically been tough for Bitcoin. This outlook is despite overall projection that the Federal Reserve cutting interest rates could provide tailwinds for risk assets – including cryptocurrencies.

Share this article

Categories

Markets

Tags

Bitcoin News BTC