SBF Denies FTX Is Eyeing Troubled Crypto Mining Firm
Sam Bankman-Fried, founder of cryptocurrency exchange FTX, quelled speculation that the firm was exploring acquisitions of struggling crypto mining firms, clarifying on Twitter on Saturday that they "didn't really look into the space."
“Really not sure why the internet memes about FTX and mining companies are going viral, the actual narrative is that we *haven’t really researched the space,” Bankman-Fried clarified on Twitter on Saturday.
In an interview with Bloomberg on Friday, there was speculation that the company was looking at mining companies. Previously, the FTX founder stated that he did not want to underestimate the possibility of a “compelling opportunity” in mining, stating:
"There could be a very attractive opportunity for us - I definitely don't want to discount that possibility."
However, the quote appears to have been taken out of context, forcing SBF to clarify that the company is “not particularly concerned with miners” but is “open to dialogue with them.”
Bankman-Fried also said in the interview that crypto miners don’t fit into the company’s core strategy and that he doesn’t see synergies from an acquisition standpoint:
"I don't see any particular reason for us to integrate with crypto miners."
"From a strategic point of view, from an acquisition point of view, there are not necessarily particularly obvious synergies," he added.
Mining loans under pressure
Bankman-Fried was asked if he was looking for mining companies in a crypto market where bitcoin mining revenues have plummeted this year.
At the same time, Russia’s invasion of Ukraine has also sent energy costs skyrocketing – a double impact on miners large and small.
Mining profitability has reached its lowest point since October 2020, according to Bitinfocharts. At the time of writing, 1Th/s Bitcoin mining profitability is $0.0956 per day, down 80% from the 2021 high of $0.464.
A Bloomberg report on June 24 revealed that bitcoin mining loans topped $4 billion, with more and more loans now underwater as the price of bitcoin and mining equipment has dropped.
Last week, Cointelegraph reported that Bitcoin (BTC) mining revenue hit a new low since mid-2021, falling to $14.4 million on June 17.
Data from Arcane Research in June showed declining profitability in the mining industry, forcing miners to start liquidating their holdings. It shows that several of these companies sold 100% of their BTC production in May — possibly to cover operating costs and repay loans.