MGT Capital Investments Inc. (OTCMKTS:MGTI), one of the biggest bitcoin (BTC) miners which is based in the United States and which operates in Washington State and northern Sweden, has received debt financing amounting to $3.7 million. This will assist the firm as it expands its bitcoin mining business. According to MGT Capital the debt comes as unsecured promisory notes that lack any stock warrants or equity conversion rights.
Despite the rise in the mining difficulty rate of bitcoin as well as the nearly flat price action that has been exhibited by the largest digital currency in the world in terms of market cap, MGT Capital is of the opinion that the acquisition of mining equipment made by Bitmain will offer the company cash on cash returns that are highly attractive.
According to MGT Crypto Strategies’ president, Stephen Schaeffer, the economics of cryptocurrency mining go through flush and lean periods but in the long term the miners who are rewarded are those who are forward-thinking and efficient. MGT also enjoys the advantage of being well capitalized and thus has a commanding position with regards to negotiating hardware and hosting sites deals.
With regards to MGT’s northern Sweden operations, Schaeffer disclosed that full control of the facility was now in the hands of the company. There has also been steady progress at the facility in the recent past with over 5,000 S9 mining rigs now operating. Currently there are 6,300 S9 mining rigs that have been installed at the facility. All the mining rigs are expected to be operating by mid this month. The delays and problems that were experienced at the facility were attributed to issues with the Swedish contractor. As a result of dealing directly with the power firm MGT has been able to capture more profits since the power costs have fallen.
Last month released financial results for the first quarter of this year. Revenues that were generated from the mining of bitcoin reached a figure of $1 million compared to $312,000 which was generated during the same period last year. However this was lower than the $1.8 million which was generated in last year’s fourth quarter.