BTC miner Bitfarms faces NASDAQ delisting over share price deficiency

Bitfarms (NASDAQ: BITF) faces a possible delisting from Nasdaq if its share price fails to meet the $1 threshold over the next six months, the block reward mining company has confirmed.

The company announced that it received a written notification from Nasdaq indicating that its shares had closed below the minimum $1 share price requirement for continued listing on Nasdaq for the past month. Bitfarms’ share price dropped below $1 in late October and has yet to hit the threshold again. It currently trades just below $0.5.

Nasdaq gave Bitfarms 180 days—until June 12, 2023—to take its share price back over $1. The exchange will give the company a written notification of compliance if, at any time before then, its share price closes at $1 or above for at least ten consecutive days.

“The Nasdaq letter is only a notification of deficiency and has no immediate effect on the listing or trading of the Company’s Shares and the Shares will continue to trade on Nasdaq under the symbol BITF,” Bitfarms noted.

It also clarified that the Nasdaq warning doesn’t affect its listing on the Toronto Stock Exchange.

Speaking to one outlet, a spokesperson for Bitfarms noted that the company is confident its fortunes will turn around despite the ‘crypto winter.’

“This period is really about the wheat separating from the chaff. We remain bullish on Bitfarms’ and are very excited about the company’s outlook, as well as the future of the [BTC] and cryptocurrency. The current state of both the crypto and [BTC] mining ecosystems is working to reinforce our commitment to the industry,” it said.

Bitfarms has continued offloading most of the BTC in its reserves as the BTC it mines prove insufficient to cover its operating costs and debt obligations. In Q3, it mined 1,515 BTC but ended up selling 2,595 BTC, with the extra coins coming from its reserve.

The turndown in BTC price has hit Bitfarms hard. The company is still servicing loans for which it gave BTC as collateral, and with the price dip, it has had to add onto the collateral. According to block reward mining analyst Jaran Mellerud, the miner must maintain a collateral value of 125% of the loan.

“(Bitfarms) holds $38 million of cash and 2,064 BTC. The problem is that 1,724 of these BTC are pledged as collateral, giving the company a total unpledged liquidity of only $44 million,” the analyst revealed.

BTC miners struggle with ‘crypto winter’

Bitfarms is one of the many block reward miners that have been hard hit by this year’s digital asset bear market. Many have been revealed to be edging closer to bankruptcy as they struggle with big loans they collateralized in BTC.

Recently, London-listed Argo Blockchain (NASDAQ: ARBK) revealed that it would sell some of its assets to improve liquidity. However, even with the sale, it stated that it couldn’t guarantee that it would manage to avoid bankruptcy. The statement came after its delisting saga on the LSE and Nasdaq for “accidentally” publishing a notice on its website that claimed it was pursuing Chapter 11 bankruptcy in the United States.

Core Scientific (NASDAQ: CORZW), which has been the biggest BTC miner by hash rate globally, has suffered the same fate. In late October, the miner announced that it might have to explore bankruptcy if it fails to improve its current financial condition.

The Nasdaq-listed Texas-based company said it anticipated its existing cash reserves would be depleted by the end of this year, possibly sooner.

This week, investment bank B Riley announced a proposed $72 million financing plan for Core Scientific to get it through its tough times. This alone may not be enough, however, with the miner said to have over $300 million worth of loans with a short maturity. It took on these loans when BTC was at its peak a year ago, and as the price has dipped, it has been forced to sell the BTC it owned at a steep discount.

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