BlockFi, a crypto lending platform that filed for bankruptcy in November, has been given court approval to put its Bitcoin mining business up for auction. The company is hoping to take advantage of the current market conditions and has already received bids for many of its assets. The saleable assets include its ASICs, which are computer hardware specifically designed to mine Bitcoin. Bids are due by February 20th and an auction will be held a week later.
The collapse of the crypto market last year caused prices of ASICs to plummet, as the yield generated by such machines is directly correlated to the value of the coins they produce. This led to a vulnerable setup for cascading liquidations when the market unwound. Core Scientific, one of North America’s largest Bitcoin mining firms, announced plans to shut down 37,000 Bitcoin mining rigs earlier this month, partially blaming Celsius for its own bankruptcy in December.
However, some firms are taking advantage of the situation and are looking to capitalize while mining machines are going for cheap. Bitcoin technology firm Blockstream announced a $125 million raise last week dedicated to expanding its fleet of mining and hosting services, and Grayscale also announced a mining fund in partnership with Foundry last October. On-chain data shows that investors who were once underwater are taking profit while they can, adding sell pressure to the market. Analysts are still unsure if Bitcoin’s January gains are a deceptive “bull trap,” or if they mark the beginnings of another Bitcoin bull market.