HyperBlock shutting down amid poor BTC market

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According to a report by Missoulian, Toronto-based HyperBlock Inc. declared that its 20-megawatt data center near Missoula is offline, and all block reward mining operations have ceased. The publically traded organization has started bankruptcy proceedings as it looks to wind down its business.

HyperBlock billed itself as a cryptocurrency asset enterprise. The company, listed on the Canadian Stock Exchange under the HYPR symbol, has mired in controversy over the past few years. Its Bonner facility operated over 13,000 hardware servers causing residents to complain about noise from the warehouse’s cooling fans.

Per the report, HyperBlock struggled to get government funding, having been rejected or withdrawn from state financing programs aimed at local businesses.

The announcement quickly follows an earlier company press release warning HyperBlock’s shareholders that the halving significantly reduced future earning by the company making its operations uneconomical because of current market conditions.

The press release mentions HyperBlock had financial advisors exploring strategic financing options to determine whether it could resume operations. Also contained within the statement was news that Energy Keepers Inc., which provided electricity to HyperBlock, ended its contract with the company effective May 14.

These developments, along with their deteriorating working capital position, made it impossible for HyperBlock to recover as they could no longer meet their financial obligations. On May 15, HyperBlock conceded defeat by announcing it appointed Crowe Soberman Inc. as the licensed insolvency trustee to negotiate settlements with creditors under the Canadian Bankruptcy and Insolvency Act.

Shutting down is the right move for the organization. Based on the reports, they have exhausted their funding options, and working capital is dwindling. The M&A options in the block reward mining sector are precarious with very few last-minute Hail Mary opportunities open.

Now that failure is upon them; it’s better to be honest and transparent with their investors.

This news should not come as a surprise to those that follow the block reward mining sector. CoinGeek predicts many more block reward miners will shut down services over the upcoming months. North American publicly traded firms will be hit hardest since the deck is stacked against them.

The post-halving BTC price pump failed to occur as many block reward miners, and BTC traders hoped for. U.S. officials continue announcing additional measures against Chinese tech companies, making it challenging to purchase spare parts or new ASIC miners.

Also, local Chinese municipalities give homegrown block reward miners generous subsidies that can offset manpower, hosting, or electricity cost. Many publicly traded North American companies will inevitably fail simply because of the cost advantage their foreign rivals have.

The only sustainable strategy for block reward miners is to prioritize developing into transaction processors and services providers. It might sound like a one-step pivot, but it requires more maturity and vision. It can only happen on Bitcoin SV, which has utility and the start of a microtransaction ecosystem.

Staying in cruise control or zombie mode on the BTC network is no longer viable or profitable.

BTC has no utility or intrinsic value outside of greed. There are no signs it will turn the corner back into cash flow positive territory for those powering the BTC blockchain. Block reward miners cannot solve themselves out of this problem. They can’t build a sustainable business on the back of an industry and token built around adoption principles that mimic a Ponzi scheme.