Speaking about the partnership, Liao says, "We all assume that this bear market will end eventually, and we just have to make sure everyone makes it through the winter."
One of the largest China-based Bitcoin mining rig manufacturers, Bitmain Technologies Ltd., and its mining spinoff, Antpool, are partnering with a Singapore-based industry financier, Antalpha, to provide a lifeline for Bitcoin mining companies during the market downturn.
The partnership aims to offer low-interest loans to miners to help them reduce borrowing costs and repay nearly $4 billion in loans backed by equipment that has fallen in value along with Bitcoin's price since it peaked in November.
Bitmain and Antpool will offer proprietary data to Antalpha, allowing Antalpha to evaluate and determine financial risk for companies in need of low-interest loans to pay back equipment loans and reduce borrowing costs.
Furthermore, Antalpha provides Bitcoin miners with a revolving line of credit that can only be used for electricity costs. According to Max Liao, managing director of business development at Antalpha, the low end of these loans is 6.6%, which is nearly half of the industry standard, and the high end is 8.8%.
He maintained that the company is taking the miners' electricity costs, which account for the majority of their cash outflows, and assisting them in reducing the burden.
However, with miners such as Core Scientific and Bitfarms succumbing to the pressures of loss, experts opine that winter has arrived. Even worse, lenders and exchanges have succumbed to liquidity crises, heightening fear throughout the ecosystem.
In a statement, Liao says,
"We all assume that this bear market will end eventually, and we just have to make sure everyone makes it through the winter."
However, to reduce the pressures of current market conditions, Antalpha announced that it would not require margin calls on some of its loans, allowing mining rigs to be held as collateral, and bitcoin miners can defer payments if necessary.
