One of the world’s largest Bitcoin (BTC) miners has raised a red flag that it will declare bankruptcy by the end of the year.
Giant Bitcoin miner reports that he may run out of cash by the end of the year
Bitcoin mining company Core Scientific, which was listed on the Nasdaq in 2021, stated that their cash will only be enough by the end of the year. Due to the sharp drop in BTC price this year, miners are struggling to maintain their operations profitably. Core Scientific said in its filing with the SEC on Thursday, October 27, that the rise in electricity costs has greatly impacted the company’s profitability.
Bitcoin was trading in a very narrow range near the $19,200 level until October 25th. Meanwhile, the Bitcoin hash rate continued to grow rapidly. This means that miners have to put in more computing power to add new blocks. If the situation doesn’t improve any time soon, we’ll likely see more miners like Core Scientific stuck.
Core Scientific says it can hold up to this date
The mining company told equipment providers that it would not be able to make payments due in late October and November. The company is also exploring various financing options, such as raising additional capital and restructuring its existing financing. He currently only holds 24 Bitcoins and $26.6 million in cash. This is significantly lower than the 1,501 BTC he held at the time of his filing with the US SEC in September.
The company’s stock is also melting
Core Scientific’s stock fell lower in the premarket hours today on CORZ. CORZ stock is down 71% in the last 24 hours, as low as $0.29. The company chose to be listed on the Nasdaq in January earlier this year. However, it has been an unfortunate year for Bitcoin miners amid the crypto winter and more selling on Wall Street. According to the Bloomberg report:
Bitcoin mining companies like Core Scientific have been increasingly choosing to sell stocks lately. As his profits dried up and higher interest rates made borrowing more expensive, he resorted to one of the least attractive options for raising money.
Core Scientific isn’t the only miner in distress
As one of the market leaders, Core Scientific troubles reflect the depressed state of the Bitcoin mining industry. Compute North, one of Core Scientific’s colleagues, filed for bankruptcy in September for at least 200 creditors totaling $500 million.
cryptocoin.com As you follow, Bitcoin is currently trading at 6-week highs. It is currently 70% off the $70,000 ATH level it reached in November of last year. This means that miners are struggling to keep up.
