Binance Pool Unveils $500 Million Loan Project to Support Bitcoin Mining Industry

With the bear market impacting the crypto mining industry, Binance has announced a new loan project.

The development comes after Bitmain founder Jihan Wu announced the creation of a $250 million fund to purchase distressed assets from miners.

Wu is currently leading spin-off Bitdeer Technologies, a bitcoin mining hardware maker, which will initially use $50 million to operate. The company plans to raise the remaining 200 million from outside investors.

Binance Supports Bitcoin Mining Industry

The $500 million project, launched by Binance Pool, is designed to provide secure debt financing services to the public as well as high-end BTC miners and digital asset infrastructure companies around the world.

“As one of the world’s leading mining pools, Binance Pool has a responsibility to help maintain a healthy ecosystem of digital assets. In light of the current market conditions, Binance Pool is launching a $500 million loan project to support crypto miners and digital infrastructure providers.”

According to the official announcement, miners will have to provide collateral, be it physical or digital assets, for the loan, for a period of 18-24 months. Interest rates range from 5% to 10%. Binance has also announced plans to introduce cloud mining products and is looking for such providers.

lower profits

Amid the weak bitcoin price and rising energy costs, miners were under tremendous pressure as difficulty increased by more than 13% in the two weeks, setting a new record. They sold off their bitcoins throughout the year to make up for the decline in profits. There have been some occasions when miners resorted to selling in a month more than they were extracting.

Many companies have struggled to keep their heads above water. One such company is Compute North, which recently filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of Texas.

Mining rigs like Iris Energy have sold $100 million of shares to generate some cash. On the other hand, Compass Mining closed its Georgia operations. The aggregator, which also happens to be one of the largest bitcoin mining pools, has frozen withdrawals as a result of a prolonged bear market.

Companies like CleanSpark and Argo, which have borrowed millions for their mining equipment, have seen huge losses month after month.

Binance Pool unveils $500 million lending project to support Bitcoin mining industry for the first time on CryptoPotato.

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