Icebreaker Finance, part of the DeFi lending platform Maple, has launched a $300 million fund for bitcoin miners,
The move comes as the mining industry struggles with access to capital markets. The pool will offer 12 to 18-month loans with interest rates ranging from 15% to 20% to blue-chip bitcoin mining and digital asset infrastructure companies in North America, Canada and Australia, Maple said in an announcement Tuesday.
"Recent market headwinds have caused lenders to pull back, while traditional financing vehicles have been slower to engage this sector," said Sidney Powell, CEO and co-founder of Maple Finance. "Miners play an essential role in growing the crypto ecosystem and local economies, and we are proud to extend a new financing vehicle to direct capital where it is needed the most."
The company is targeting companies with "effective treasury management and prudent power strategies" while offering only fully collateralized loans, either by "real-world" or digital assets. That includes, for instance, mining hardware, power transformers and other physical assets.
"The market is now maturing to appreciate that non-recourse SPV ASIC backed financing can be inappropriate given the volatility in value of ASICs. Instead, a more diverse security package is required," said Glyn Jones, CEO and founder of Icebreaker Finance.
Before helping start Icebreaker earlier this year, Jones was a managing director at Deutsche Bank and Standard Chartered Bank, as well as general manager for ANZ.
Several of the biggest bitcoin miners were forced to sell a large portion of their bitcoin holdings earlier in the summer as the sharp decline in the cryptocurrency's value put pressure on bitcoin-backed loans.
Some of those companies had historically maintained a policy of holding the mined bitcoin. Yet Bitfarms sold 3,000 BTC in June to pay down a $100 million bitcoin-backed loan from Galaxy, while Argo sold 637 BTC and CleanSpark 328 BTC.
Core Scientific sold 7,202 bitcoin in June (worth about $167 million at the time and almost all of their holdings), stating that the money was used for equipment payments, capital investments in additional data center capacity and scheduled repayment of debt.
"We are working to strengthen our balance sheet and enhance liquidity to meet this challenging environment," CEO Mike Levitt said at the time.