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- It’s the investment bank’s second $100 million investment
- BTC Price at the time of writing – $19,063.68
- The stock has plummeted 35% over the past month
IREN, a publicly traded sustainable Bitcoin mining company, has agreed to sell up to $100 million in equity to investment bank B. Riley Financial over the course of two years.
That is the second significant investment that B. Riley has made in the mining industry—it made the same $100 million deal with Core Scientific in July—despite the industry’s declining profits and intensifying competition in the crypto bear market.Despite obvious obstacles, the move demonstrates that traditional financial institutions continue to be interested in Bitcoin.
Iris shares closed down 9% on Friday
Friday’s SEC filing stated that B. Riley could acquire a 31% stake in IREN by purchasing up to 25 million shares within 24 months of September 23.From that total, Iris has already distributed 191,174 ordinary shares as payment for the bank’s commitment.
Iris went on to say that she can’t use the money from the sale in a way that B. Riley doesn’t like or that “may not yield a significant return.
On Friday, the day of the filing, Iris shares were down 9% at the close.The stock has dove 35% over the course of the last month, and more than 85% over the course of the past year.
This year, a wide range of crypto companies are experiencing share losses of this kind.B. Riley’s other Bitcoin miner, Core Scientific (CORZ), has lost roughly the same amount over the past year.In the second quarter, the publicly traded miner had to sell the vast majority of its Bitcoin holdings.
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Mining operations are investing for the long term
Every time they mine a block, which secures the network, Bitcoin miners make money by earning a fixed amount of Bitcoin.Since the Ethereum network switched to proof of stake, critics can no longer refer to Bitcoin as an environmental scourge because mining those blocks using the proof of work method consumes a lot of energy.
Profits made by miners have also decreased as Bitcoin’s price has fallen throughout 2022.Mining businesses had even filed for bankruptcy as a result of this.The difficulty is exacerbated by the network’s ever-increasing hash rate, requiring miners to improve their cost-effectiveness in order to remain competitive.
However, major mining operations are making long-term investments.Core Scientific added 14,000 more ASIC servers in July despite selling more coins.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
