Bankrupt crypto lending platform BlockFi received court approval to put its Bitcoin mining business up for auction. 

The company plans to sell its equipment as fast as possible, to take advantage of currently favorable market conditions.

Selling While They Can

BlockFi lawyer Francis Petrie told US Bankruptcy Judge Michael Kaplan on Monday that the company has already received bids for many of its assets, and expects more to come, according to BNN Bloomberg. This comes a week after the company agreed to sell $160 million in loans backed by its Bitcoin mining hardware – some of which were already under collateralized 

“We’ve received substantial interest in the market for bidding purposes and current volatility in the cryptocurrency market, which means we need to act quickly,” said Petrie. Bitcoin’s price rose from under $17,000 to above $23,000 in January, bringing the average Bitcoin miner back into the profit zone, according to Glassnode

BlockFi’s saleable assets include its ASICs – computer hardware specifically designed to mine Bitcoin in a cost-effective manner. Celsius – a rival crypto lender that went bankrupt last summer – has also been selling its mining equipment as part of its restructuring process, with plans to sell tens of thousands of additional machines. 


Bids for BlockFi’s assets are due by Feb 20. An auction will be held a week later, with BlockFi to return to court in March to examine any proposed deals. 

ASIC prices plummeted last year alongside Bitcoin’s price, due to the yield generated by such machines being directly correlated to the value of the coins they produce. Like Bitcoin, ASICs were frequently used as collateral for loans to purchase even more equipment, creating 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, whose energy costs were partially subsidized by Celsius. The miner placed some blame on Celsius for its own bankruptcy in December. 

BlockFi filed for bankruptcy shortly after the collapse of FTX and Alameda Research in November, to which the lender had over $1.2 billion in cumulative exposure

Capitalizing on the Collapse

While numerous other major miners – including Iris Energy and Argo Blockchain – struggle under the circumstances, other firms have chosen 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. Grayscale also announced a mining fund in partnership with Foundry last October, intentionally released during a so-called “shakeout” phase for the mining industry to scoop up low-cost equipment. 

Analysts are still somewhat torn on whether Bitcoin’s January gains are a deceptive “bull trap,” or if they mark the beginnings of another Bitcoin bull market. Amid the confusion, on-chain data shows that investors who were once underwater are taking profit while they can, adding sell pressure to the market. 


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