In order to assist Bitcoin miners who have difficulty coping with the challenging crypto market conditions, Binance has established a $500 million fund. (1)
Who is this Fund meant for ?
The company's mining service, Binance Pool (2), will offer loans for privately held and publicly traded Bitcoin miners. To be eligible for loans within 18 to 24 months, miners must provide security in tangible or intangible assets. Interest rates on Binance transactions will range from 5% to 10%.
The idea comes after a difficult few months for Bitcoin miners as the value of the cryptocurrency fell. Due to the low price of bitcoin, miners' profits have dramatically decreased; Compute North even filed for bankruptcy as a result. According to statistics from The Block Research (3), bitcoin miners' earnings dropped 16.2% last month to around $550.5 million, marking the industry's sixth loss in the previous six months and its lowest sum since November 2020.
What are other businesses doing?
Not just Binance but other businesses are attempting to boost the cryptocurrency mining sector. Jihan Wu, the creator of Bitmain and a Chinese crypto tycoon, established a $250 million fund last month to purchase troubled assets from Bitcoin miners. Bitdeer Technologies Holding Co., owned by Wu, intends to put $50 million of its own money into the project. Wu then hopes to acquire $200 million more from other investors. A $300 million loan pool for Bitcoin miners was formed by DeFi platform Maple Finance (4) last month as well. The site would feature interest rates of 15% to 20% and offer loans with terms of 12 to 18 months.
Grayscale, a cryptocurrency asset management, established a new company called Grayscale Digital Infrastructure Opportunities LLC earlier this month to make investments in Bitcoin mining equipment. The organization intends to buy mining equipment with the intention of making money by selling the bitcoins it produces.