The bitcoin mining community took out massive loans during the 2021 bull market, which negatively affected their bottom line during the subsequent bear market. Analyzes of Bitcoin mining data by Hashrate Index show that the 10 largest bitcoin mining debtors cumulatively owe more than $2.6 billion.

Public bitcoin mining companies with the highest debt. Source: Hashrate Index
Core Scientific, the largest debtor of the lot — with $1.3 billion in liabilities on its balance sheet as of Sept. 30 — recently filed for Chapter 11 bankruptcy protection in Texas due to declining revenue and BTC prices. Marathon, the second-largest debtor, has convertible note obligations of $851 million. As a result, Marathon prevents bankruptcy by allowing debt holders to convert convertible notes into shares.

Most bitcoin miners, including the third-largest debtor, Greenidge, are undergoing debt restructuring. As an industry, the debt-to-equity ratio of public bitcoin mining companies reveals high stakes.

As Hashrate points out, a debt-to-equity ratio of 2 or higher is considered risky in most industries. The chart below shows the extremely high debt-to-equity ratios currently being exercised by some of the notable bitcoin miners.

Public bitcoin mining companies with the highest debt-to-equity ratios. Source: Hashrate Index
Given that more than half of the 25-year bitcoin miners boast extremely high debt-to-equity ratios, the mining sector could face potential restructurings and bankruptcy filings unless the bulls return.

While some companies may close down or slow down operations to reduce liabilities, it will help sustainable miners expand their footprint as they purchase competition equipment and facilities.

Related: Bitcoin Mining Firm Northern Data Says It Has No Financial Debt, Projects $204 Million in Revenue for 2022

On December 20, Greenidge signed a $74 million debt restructuring agreement with NYDIG, a financial technology company dedicated to Bitcoin.

As Cointelegraph reported, the NYDIG agreement will see miners purchase with approximately 2.8 exahashes per second (EH/s) of mining capacity. In turn, the mining company will see debt decrease from $57 million to $68 million.