Binance Announces $500 Million Fund To Lend to Bitcoin Miners

Binance has established a $500 million fund to lend to Bitcoin miners. The initiative comes at a time when Bitcoin miners are struggling to cope with Crypto Winter. Binance has established the fund to assist Bitcoin miners in coping with difficult crypto-market conditions.

Binance Pool, the company’s mining service, will provide loans for both private and publicly traded Bitcoin miners, who will be required to pledge security in the form of physical or digital assets to obtain loans with terms ranging from 18 to 24 months. Binance will charge interest rates ranging from 5% to 10%.

The initiative comes after a difficult few months for Bitcoin miners as the price of Bitcoin fell. Miners’ revenues have plummeted due to low bitcoin prices, with Compute North declaring bankruptcy.

Bitcoin miners’ revenue fell 16.2% last month to $550.5 million, the fifth decline in the last six months and the lowest total since November 2020.

Binance is not the only company looking to help the cryptocurrency mining industry. Jihan Wu, the founder of Bitmain in China, established a $250 million fund last month to purchase distressed assets from Bitcoin miners. Wu’s Bitdeer Technologies Holding Co. intends to invest $50 million of its funds before seeking an additional $200 million from outside investors.

Maple Finance, a DeFi platform, also launched a $300 million lending pool for Bitcoin miners last month. The platform will charge interest rates ranging from 15% to 20% and will offer loans with terms ranging from 12 to 18 months.

Grayscale, a crypto asset manager, established a new entity called Grayscale Digital Infrastructure Opportunities LLC earlier this month to invest in Bitcoin mining hardware. The entity intends to buy mining rigs and hopes to profit by selling the Bitcoins earned.

Image Credit: Shutterstock