Bloomberg analysts say up to around $4 billion worth of loans taken out against Bitcoin mining equipment are coming under stress, due to the market downturn.
According to the report, an increasing number of these loans are underwater, with a depreciation in the value of the mining equipment further impacting the health of the positions.
In order to cover their obligations, some miners have sold Bitcoin reserves – applying further downward pressure on the market. It is estimated that many miners are operating at a loss at current Bitcoin prices.
Goldman Sachs has downgraded its rating for Coinbase stock from "neutral" to "sell", along with cutting its price target for the stock from $70 to just $45. Coinbase shares dropped almost 6% in pre-market trading.
The downgrade was attributed to the continued crypto market decline, with Goldman claiming current trading volumes imply further drops are yet to come in Coinbase revenue.
Cryptocurrency platform Voyager Digital has issued a notice of default to Three Arrows Capital (3AC), for failing to pay a large loan of Bitcoin and USD Coin. The loan was in the order of hundreds of millions of dollars worth of the assets.
Voyager has also stated that it is exploring legal recourse for the recovery of funds from 3AC. The company reportedly placed a $10,000 limit on customer withdrawals last week.
