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Bitcoin miner Core Scientific is in trouble, and may lose profits in November. Maybe even considering bankruptcy.
Bitcoin miner Core Scientific says it is exploring bankruptcy amid financial difficulties. As a result, creditors are working with a law firm to explore their options. Bloomberg first reported the news, citing details close to the matter.
Core Scientific can’t afford to pay
Core Scientific, one of the world’s largest Bitcoin miners, announced last week that it will not be able to cover its payments in October and November. This prompted a group of exchange rate investors to consult restructuring lawyers.
Bloomberg Core Scientific is said to be at 24 B
Bitcoin and $26.6 million in cash. The company’s value has fallen over 80% in the past five days, down to $0.18 per share. It went public earlier this year as it entered into a merger.
The decline in the value of Bitcoin in 2022 has affected the majority of the market, and miners have suffered greatly. Electricity prices have increased, adding to the problems in the financial sector of the market.
These companies have found it difficult to raise money in the middle of the crypto winter. If Core Scientific is anything to go by, that’s another legendary enterprise. Ernst and Young has also stepped down as an outside auditor.
BTC Miners Work New Strategy
Core Scientific is not the only mining company in trouble. The industry is seeing a change in how they conduct their business, because of the low prices that affect their work.
BitMine Immersion Technologies entered into a line of credit with Innovative Digital Investors Emerging Technology to the tune of $1 million. This is used to purchase equipment for work and work capital. It is also turning its first business into self-drilling.
Meanwhile, Argo Blockchain saw its shares drop 40% after failing to raise $27 million in funding. The company said that if it doesn’t manage the other funds, it will suffer from negative cash flow or it will have to cease operations.
BTC Miners face high stress
Mining pools like Poolin are also suffering from the financial crisis. In September, it was announced that it was suspending withdrawals, stock exchanges, and internal transactions as a result. Hash rates have dropped and mining revenues have also dropped.
The majority fall in the hash rate and increasing costs are the primary reasons behind the stress of miners. Miner reserves are at a 12-year low, down to just 1.91 million BTC. Miners are buying about 8,000 Bitcoin per month to cover expenses, according to Glassnode.
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