COVID-19 Hits Canadian Crypto Mining Firm Bitfarms, Forced to Lay Off Staff to Maintain Cost Efficiency
Publicly-traded cryptocurrency mining company Bitfarms has reduced the number of its staff members because of the ongoing social and economic crisis caused by the Coronavirus pandemic. The crypto mining company is listed on Canada’s TSX Venture Exchange. The mining firm is based in Toronto, Canada and is one of the biggest crypto mining operations in North America.
Bitfarms’ Response to Coronavirus Effect
According to the announcement, Bitfarms is laying off some of its employees on a temporary basis in line with government guidance to assist in combating the spread of coronavirus. However, the cryptocurrency mining company is also implementing permanent cost-saving measures to minimize overhead costs so that to maintain long-term viability.
John Rim, the Chief Financial Officer (CFO) of Bitfarms, stated that such cost-saving measures would help to reduce monthly general and administrative expenses. He said: “Once fully implemented over the next several weeks, we expect the cost-saving measures to reduce our monthly general and administrative expenses by approximately 20 to 25%.”
John Rim further mentioned that the cost-cutting measures would help the company to withstand volatility in business risks associated with crypto mining and to help the firm to remain profitable through the long-term, including potential challenges associated with the forthcoming halving. The much-anticipated Bitcoin halving event is expected to happen next month. During this significant event, Bitcoin will see its mining reward reduce from 12.5 BTCs to 6.25 BTCs.
It remained unclear how many employees have been let go and what is the present headcount of the crypto mining company. As per the report, the mining company currently operates five blockchain computing centers in Quebec, Canada, powered by competitively priced and clean hydroelectricity.
Maintaining the Hash Rate
Bitfarms stated that despite the havoc caused by COVID-19 crisis and the significant decline of Bitcoin prices from March 12th to March 19th, it has managed to maintain an average daily hash rate of 630 petahash per second (PH). During those dates, Bitcoin prices dropped by 50% to below $4,000 at particular days and were slowly recovering. After March 20th, Bitcoin price stood mostly above $6,000 and the crypto mining firm maintained an average daily hash rate of about 750 PH.
Emiliano Grodzki, Bitfarm’s interim CEO and Chief Strategy Officer, commented on the network difficulty. He stated that their quality and scale of operations has enabled them to continue generating positive cash flow in these difficult times.
Ripple Effects of Coronavirus on Bitcoin Miners
Where the COVID-19 crisis is affecting several other businesses, economies, and other financial markets, the field of crypto is not an exception. Several other businesses have closed their work due to this pandemic, and many others have taken safety measures to fight against the epidemic. Crypto mining operations is one area where the effect of the COVID-19 has proved to be dangerous. The virus outbreak has adversely hit the mining operations. Over 40 established crypto mining operations have been forced to close down their businesses because of the price decline of Bitcoin and unprofitable mining equipment business. Bitfarms joins the list of crypto mining companies that have recently laid off their employees. However, it remains to see how crypto mining firms will cope with the current situations.
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