Washington’s Crypto Mining Company Giga Watt is Feeling the Bear Market Pricing Pressure
The Giga Watt company, one of the most important startups related to virtual currencies in Washington, is not having a good time.
Investors are currently dissatisfied about how the company managed its operations and angry about the massive debt it has. And indeed, the project was very promising but ended up experiencing losses due to extreme volatility in the cryptocurrency market.
Back in October 2017, Giga Watt was very profitable with the growing market and Bitcoin close to reach $20,000 dollars in December. The firm was increasing its reputation as well, which attracted several investors.
The company wanted to create a large mining farm with 24 prefabricated buildings and build a new generation of virtual currency miners. Indeed, the plans were so promising that local authorities were excited about it. However, this dream was not able to prosper. The company currently has millions of dollars of debt and legal problems with different parties.
According to some reports, the company started to have problems when the bull market ended and a period of volatility started. In just a few weeks, some virtual currencies lost more than 70% of their price. Nowadays, there are some projects that are 95% down from their all-time high. Additionally, mining activities are also less profitable and the costs of electricity are also not so clear.
Since Bitcoin is traded under $6,500 dollars, mining profitability is very limited. Companies should have very cheap electricity and operational costs, which is sometimes difficult to achieve. Smaller players in the market have already left it.
George Turner is currently the head of the company and he will remain in that position until they decide to appoint a new CEO. He knows that the current situation of the company is not the one they were expecting but they are also thinking about important changes to make it profitable again.
One of the most urgent things that the company needs to solve is a $5 million dollars debt that is owed to contractors. Other issues are related to the execution of some projects that are not being delivered on time.
Dave Carlson, the founder of the company, stepped down in August. About his decision to leave the company, he said that he was not able to head the company in the right direction.
Moreover, Giga Watt has also ben affected by investor lawsuits about the controversial financial strategy adopted by the firm. The company decided to launch an Initial Coin Offering (ICO) to raise capital selling its own virtual currency. In this case, several investors were from the Seatle area.
The tokens provided by the company allowed investors to own their mining computers for a discounted price. Additionally, the company had over $25 millions of dollars that were invested by Carlson and other owners of the company.
The local authorities were excited about this project because it could have provided high-paying jobs and juicy tax revenues. But the situation in the market was not so prosperous, affecting the whole industry.
Another mining company conducted by Malachi Salcido, explained that the current Bitcoin price is just a correction and that it will end soon. Additionally, he said that this is the fourth time that he experiences this situation since 2012.
Giga Watt, however, said that will be generating revenue and repaying its debts by mining Bitcoin and selling them to generate between $60,000 to $80,000 dollars a month.
“That by itself is not going to solve our problems,” commented Turner. “But we’ve reached the point where we’re looking for every possible legitimate stream of revenue.”