7/8/22 FAL Weekly Digest
The FAL Weekly Digest is a source for this week’s biggest cryptocurrency-related news and updates. This newsletter features excerpts and links to this past week’s biggest news articles written by members of FAL Consulting’s writing team or gathered from other listed sources.
Crypto Mining
In recent months while crypto prices took a nosedive, the BTC mining difficulty has still been increasing, further reducing any revenue by BTC miners. Some mining machines were rendered unprofitable at recent prices and difficulty.
In the month of June, Binance estimates that BTC miners generated $656.47 million while ETH miners totaled $549.58 million. In the past few months, ETH mining outpaced BTC mining by around $100 million.
Miner revenues have declined to the lowest levels since December 2020.
Bitmain releases new Ethereum miner, despite… everything
For the past few years, while industrial BTC mining became more prominent in larger institutions, the mining difficulty for BTC became so difficult that it was impossible for individuals to do so without investing in multiple ASIC miners.
While Bitmain mainly focuses on Bitcoin miners, they did release the Antminer E3 in 2018, an Ethereum mining rig. The upcoming model will be named Antminer E9. The model uses the Ethash algorithm and can mine Ethereum or Ethereum Classic and is priced at $9,999. The device has a hashrate of 2400 MH/s (Megahash per second), which is equivalent to around 25 Nvidia GeForce 3080 GPUs. The MSRP for 3080’s range from $699 to around $800 depending on the model and brand.
Many ETH miners have either converted their operations or are ready to do so pending the upcoming Merge to proof-of-stake.
Compass Mining cuts 15% of its staff
June 27: Dynamics Mining tweeted that they were terminating the hosting agreement due to non-payments from Compass.
June 28: Compass Mining announced that the Board of Directors has accepted the resignations of their Chief Executive Officer and the Chief Financial Officer. They temporarily appointed their Chief Technology Officer and Chief Mining Officer as co-Presidents and CEOs while the board searches for permanent candidates.
June 29: Compass Mining officially denied the allegations made by Dynamics and claims to have “performed all of its obligations under its contracts with Dynamics, including its financial obligations.” They have also filed a lawsuit with a request for expedited relief to protect its interests and the interest of its customers.
July 7: New co-CEO’s announce that 15% of the staff would be cut and that executives would be taking pay cuts of up to 50%. They will also be reevaluating their marketing approach.
The firm admitted to growing too quickly, like many crypto companies. Until the recent bear market, the company was repeatedly selling out their mining rigs and hosting services. Their immediate and continued success since launching in January 2021 was met with more hires to keep up with demand.
Acquisitions and Bankruptcies
Nexo to acquire crypto lender Vauld
Vauld is a crypto lending and trading platform and the latest of several firms to meet serious issues in the fallout of Terra’s collapse.
On Monday July 4th, Vauld announced that it had paused customer withdrawals as it admitted it was “facing challenges” amid market volatility. A blog post revealed that customers had withdrawn $197.7 million since Jun. 12, resulting in a liquidity crisis.
“Upon successful completion of the transaction, Nexo plans to acquire up to 100% of Vauld and reorganize its future operations with the aim to accelerate its deeper presence in Asia,” the company said in a statement on Tuesday.
Read more on Info Hub (premium)
FTX.US strikes deal to acquire BlockFi
BlockFi said that the current deal with FTX will allow it to protect customer assets on the platform. On Jun. 16, it was revealed that BlockFi was one of several firms to liquidate Three Arrows as it failed to meet a margin call when the market crashed.
BlockFi CEO Zac Prince said that the Three Arrows saga “spread fear” in the market, before revealing that BlockFi suffered losses of $80 million in the fallout. The firm also stated that this number was a small fraction compared to losses reported by other lending firms.
Read more on Info Hub (premium)
Crypto brokerage platform Voyager files for Chapter 11
US-based crypto platform Voyager Digital said it filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code as it seeks to implement its reorganization plan and "maximize value for all stakeholders." Chapter 11 generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time.
A blog post from 2019 on Voyager's company website advertised that US dollar deposits are covered under the Federal Deposit Insurance Corporation (FDIC) and users are "guaranteed a full reimbursement" of up to $250,000. However, the small print of Voyager's terms points out that FDIC insurance only covers Voyager's bank – Metropolitan Commercial Bank — and "does not protect against the failure of Voyager or any Custodian." This aspect alone took many people by surprise, with the possibility of not being returned their funds even after bankruptcy is a very scary thought. Will be following very closely over next couple months.
Read more on Info Hub (premium)
Market
Market Cap: $943.9 B; up from $865 B last week
24h Volume: $71.744 B; down from $73.635 B last week
BTC Dominance: 43.2 %; up from 42.6% last week
ETH Dominance: 15.5%; up from 14.7% last week
None of our posts or newsletters are meant to be taken as financial advice.
