Written by 4:07 am Bitcoin

Iris Energy unaffected by halt to new power connections for bitcoin miners

These projects will be temporarily suspended for 18 months while the government develops a framework for the licensing of renewable energy-powered bitcoin miners

In November 2022, Canada’s Manitoba province government suspended new connections to cryptocurrency mining projects. While Québec implemented a framework for cryptocurrency miners that includes higher rates and a cap on the amount of electricity available, the announcement said.

British Columbia is attractive to “green bitcoin miners” as it has some of the cheapest electricity rates in North America and an abundance of renewable hydropower.

“Cryptocurrency mining consumes massive amounts of electricity to run and cool banks of high-powered computers 24/7/365, while creating very few jobs in the local economy,” said Minister Osborne.

The pushback on energy-intensive cryptocurrency mining by regional Canadian governments comes after the collapse of Bahamas-based exchange FTX crowned a horror year of frauds and bankruptcies for investors in the sector.

Iris Energy shares have crashed 95.8 per cent to a market value of $US65.4 million since its November 2021 initial public offer at $US28 per share.

The bitcoin miner attracted several high-profile Australian investors to its share register including Grok Ventures, Wilson Asset Management and Regal Funds Management.

Sydney-based venture capital group Grok Ventures which describes itself as focused on investing in renewable energy and clean tech didn’t respond to a November 22 request for comment on its investment.

Bitcoin price

Over the past week, the bitcoin price traded flat around $US16,800. For November Iris Energy said it made average revenue of $US18,955 per bitcoin on electricity costs of $US12,581 per bitcoin.

Total bitcoin mined fell 66 per cent versus October in a fall it said primarily reflected the termination of the group’s limited recourse bitcoin mining equipment financing facilities following receipt of an acceleration notice from the lender.

It said approximately $US103.4 million of principal amount of loans were outstanding under the special purpose vehicles (SPV) facility as at October 31 and the lender has declared the entire principal amount due and payable.

However, Iris has repeatedly said the structure of the non-recourse loans means the lender has no legal rights over the parent company.

In a non-recourse loan the lender has no rights other than to the collateral offered in the event of a default. Iris disclosed it expects the creditor to secure its rights to the bitcoin mining hardware as the collateral.

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