Bitcoin Mining Giant Core Scientific Bankruptcy
Giant Bitcoin Mining Essential Scientific Insolvency: Core Scientific, the most significant Bitcoin miner in the world, told the US Securities and Exchange Commission that it has stopped making any loan payments.
Blockchain pioneer Core Scientific said in a statement filed with the SEC that the board had decided the company would not make the payments scheduled for late October and early November.
Core Scientific’s operating performance and liquidity have been negatively impacted by the protracted decrease in the price of Bitcoin, the increase in power bills, the rise in the hash rate of the whole Bitcoin network, and the legal conflict with Celsius Networks LLC.
Core Scientific said they could have depleted their cash reserves by 2022. The company has 24 Bitcoins as of October 26 and around $26.6 million in cash. They owned 1,051 Bitcoin and about $29.5 million in cash as of September 30. CORZ opened over 70% lower today.
More Bitcoin Miners Capitulate Like Core Scientific?
- The Bitcoin hashrate is at an all-time high, per Glassnode’s data. The rise in the Bitcoin hash rate signifies increased mining competition. Power consumption rises as Bitcoin mining becomes more challenging.
- Even so, the price of bitcoin has dropped by around 70% since reaching an all-time high in November, which hurts miners’ profitability.
- The Production Cost Floor for Bitcoin is currently centered at $17,000. It is the price that miners pay to create new Bitcoins. The Production Cost Floor is increasing, according to Charles Edwards, a cryptocurrency industry expert and the owner of Capriole Investments.
- It is due to various factors, including a rising hash rate, rising power use, and rising electricity prices.
- The once-largest publicly traded miner, Core Scientific, has nearly capitulated. The locals think that the likelihood of other such stories is increasing.
Legal Trouble With the Bankrupt Celsius Network
- With the defunct Celsius Network, Core Scientific had a deal to supply the hosting infrastructure. According to the agreement, Celsius owns the devices and receives compensation for any cryptocurrency mining.
- However, according to Core Scientific, Celsius owes them $2 million for the cost of the electricity. Celsius disputes that Core failed to mention in the contract that it would pass on increased electricity prices.
- On October 19, Core requested that a bankruptcy court order Celsius cover all unpaid electricity bills. Additionally, they want the contract between the two businesses to be terminated.
- The impact on the Company’s operating performance and liquidity is due, in part, to the legal issues with the insolvent Celsius Network.
Also Read: Can Crypto Be Hacked?
