Quebec

Bear market uncertainty is the perfect time to build and learn, says Sato exec

Fanny Philip, COO of Sato Technology, doubled down on believing that bear markets should be considered a builder’s market for mining companies.

The decisions made by companies during bear markets play a pivotal role in determining their longevity in the crypto ecosystem. Representing Canadian Bitcoin (BTC) mining firm Sato Technologies, COO Fanny Philip revealed what it takes to survive the bearish loom as the market prepares for the next bull run.

Speaking to Cointelegraph during the Surfin’ Bitcoin 2022 event in France about the impact of bear markets on business, Philip said now is the time for mining companies to build and learn.

Sato is a digital assets mining company, publicly traded on the Toronto Stock Exchange (TSXV) since Sept. 2021 and mines both Bitcoin (BTC) and Ether (ETH).

Philip further told Cointelegraph about the initial challenges of setting up in the industry despite entering the space during a bull market.

The high demand for miners in the Quebec region of operation, where the company initially set up shop, caused a moratorium on new mining facilities and unfriendly sentiments from the local residents. Moreover, Philip related the global pandemic as a catalyst for “difficulties in sourcing electrical equipment.”

Though when asked about the effects of the bear market, Philip had more positive sentiments than negative ones. When asked if bear markets are a good thing, she answered:

“To build? Perfect. Bear market is a built market for us.”

She also commented on the relationship between the price of BTC, mining and purchasing mining equipment.

“When the price of Bitcoin is low, you mine more,” Philip said. “If you have to [purchase] equipment, since it’s linked to the price of the Bitcoin, the price of the equipment decreases a lot.”

All of these factors mentioned above help companies in the industry build, and according to Philip, Sato is in the building phase.

This can be seen in the company’s brand new agreement with Foundry Digital LLC (Foundry). The two companies struck a deal that makes it possible for Sato to host up to an additional 4,300 miners at Center One in Québec. All of which will be powered by renewable energy.

Sato uses its mining capabilities to mine a small amount of ETH in addition to its primary focus on BTC mining.

When asked about any strategies to face the upcoming Ethereum Merge, Philip said it’s the time to diversify and learn about options.

“What’s going to happen, nobody really knows. That’s why we decided to diversify. Mining is our core business but we develop a lot of applications on top of the Lightning Network.”

On an end note, she highlighted that The Merge could be seen as an opportunity to look at all possibilities to build and earn within the Ethereum ecosystem. “It’s all part of the evolution,” Philip concluded.

Quebec Pension Fund loses almost entirety of its Celsius investment in less than ten months

“For us, it is clear, when we look at all this, we arrived too soon in a sector which was in transition,” says CEO Charles Émond.

According to local news outlet LaPresse on Wednesday, the Caisse de dépôt et placement du Québec (CDPQ), an institutional investor chartered with managing retirement assets in Canada’s predominantly French-speaking province of Quebec, wrote off almost the entirety of its CA$200 million ($154.7 million) investment in troubled cryptocurrency lender Celsius Network.

The move came just ten months after the CDPQ and growth equity firm WestCap made a joint investment of $400 million into Celsius at a valuation of $3 billion. At that time, Celsius boasted over 1,000 employees, $25 billion in total assets and $850 million in cumulative interest paid to depositors.

However, as an unregulated and centralized entity, a depositors’ assets are not protected in the event of losses, nor is the firm subjected to any restrictions on the use of leverage. During the onset of this year’s crypto winter, the sudden and violent crash of Bitcoin (BTC) and other digital assets left a $2.85 billion gap in Celsius’ net assets. As a result, it suspended withdrawals on the accounts of nearly 1.7 million customers in June.

It appears that the loss on Celsius represents only a negligible fraction of the CDPQ’s portfolio. By June 30, the CDPQ managed a combined CA$391.6 billion in total assets (or about $303.4 billion), decreasing by 7.9% in the past six months. The entity is currently evaluating its legal options against Celsius, although it has not shared any details. According to court filings, Celsius is scheduled to run out of money by October.