Cipher

Galaxy

Bitcoin

April

when

<ul>
 <li>Rhodium Encore obtains $30M financing as it faces bankruptcy.</li>  
 <li>Galaxy Digital offers Rhodium a loan in cash or Bitcoin.</li>  
 <li>Rhodium’s financial troubles link to a dispute with its building owner.</li> 
</ul>  
<p>Rhodium Encore LLC, a Bitcoin mining startup based in Texas, has secured a $30 million contract from Galaxy Digital Holdings Ltd. The financing comes as it navigates Chapter 11 restructuring. This leasing arrangement allows the organisation to choose between a 14.5% interest rate on cash or a 9.5% rate on BTC. It is a rare case of crypto being directly used in insolvency proceedings.</p>  
<h2 class="wp-block-heading" id="h-landlord-dispute-leads-to-bankruptcy">Landlord Dispute Leads to Bankruptcy</h2>  
<p>Rhodium's financial problems began with a conflict with its landlord and power supplier, Whinstone US Inc. The situation worsened when Whinstone was acquired by Riot Platforms, a contender in the Bitcoin extraction's economy.&nbsp;</p>  
<p>This misunderstanding was a major factor in the company's choice to submit for Section 11 bankruptcy in August 2024. The firm reported liabilities between $50 million and $100 million, with its stocks considered between $100- $500M.</p>  
<h2 class="wp-block-heading" id="h-btc-s-role-in-bankruptcy-financing">BTC's Role in Bankruptcy Financing</h2>  
<p>Rhodium’s loan agreement with Galaxy Digital stands out because it includes the option to borrow in <a href="https://cryptonewsland.com/metaplanet-and-sbi-collaboration-set-to-accelerate-bitcoin-adoption-in-japan/" target="_blank" rel="noopener noreferrer nofollow">Bitcoin</a>. This choice brings an added risk due to Bitcoin’s well-known price swings. Yet, Rhodium chose this path, reflecting the serious financial pressures the company faces.&nbsp;</p>  
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper">
  https://twitter.com/RoundtableSpace/status/1830454844613693950
 </div>
</figure>  
<p>The inclusion of Bitcoin in this financing plan shows how cryptocurrency is playing a growing role in financial restructuring, especially in struggling industries like Bitcoin mining.</p>  
<h2 class="wp-block-heading" id="h-challenges-across-the-bitcoin-mining-industry">Challenges Across the Bitcoin Mining Industry</h2>  
<p>Rhodium Encore’s difficulties are part of a larger problem affecting the BTC <a href="https://cryptonewsland.com/the-misunderstood-tale-of-bitcoin-minings-survival-in-china-was-there-never-an-official-bitcoin-mining-ban/" target="_blank" rel="noopener noreferrer nofollow">mining </a>industry. The Bitcoin halving in April 2024 reduced production rewards, which in turn squeezed profit margins for many miners. This has increased financial stress across the sector. Companies like Riot Platforms and Cleanspark have responded by buying other miners to increase their hashrate and expand power supplies.</p>  
<p>&nbsp;However, not every company has the funds to follow these aggressive growth strategies. For instance, miners like Iren and Cipher have focused on securing new opportunities that require less capital but promise long-term growth. The big question is whether these different strategies will shape the future of BTC processing.</p> 
<p>The post <a href="https://cryptonewsland.com/rhodium-encore-secures-30m-loan-amid-bankruptcy-from-galaxy-digital/" rel="noopener noreferrer nofollow">Rhodium Encore Secures $30M Loan Amid Bankruptcy from Galaxy Digital</a> appeared first on <a href="https://cryptonewsland.com" rel="noopener noreferrer nofollow">Crypto News Land</a>.</p>

Rhodium Encore Secures $30M Loan Amid Bankruptcy from Galaxy Digital

Table of Contents

Crypto News Land

Other articles published on Sep 2, 2024

Bitcoin Mining Revenue Hits New Low as August Sees Decline in Mined BTC

Ripple Partner SBI Teams Up with Japan’s Metaplanet for Bitcoin Management—Could XRP Be Next?

Users Panic As Whale Sends 90K ETH to Binance in the Last 24 Hours

Investors Anticipate Economic Developments as US Markets Close for Labor Day

Bitcoin Down? Why Are Central Banks Accumulating Tons Of Gold?

FTX Under SEC Scrutiny Over Plans to Repay Creditors in Crypto and Stablecoins

Join our free newsletter for daily crypto updates!