Bitcoin mining giant Core Scientific on the verge of bankruptcy

Bitcoin mining giant Core Scientific explained in a filing with the US Securities and Exchange Commission that they are stopping all loan payments.

Core Scientific – a leader in blockchain infrastructure – said in a filing with the SEC that the board has decided the company will not make payments in late October and early November.

This is because the core scientific operational performance and liquidity have been severely affected by the prolonged halving of the bitcoin price, the increase in the cost of electricity, the increase in the global bitcoin network hash rate, and litigation with Celsius Network LLC.

Core Scientific estimates that they may run out of cash resources by the end of 2022 or earlier. The company has 24 BTC and approximately $26.6 million in cash as of October 26. He had 1051 BTC and approximately $29.5 million in cash as of 30 September. CORZ opened today down about 70%.

More Bitcoin Miners Surrender Like Core Scientific?

According to data from Glassnode, the hash rate of bitcoin is at an all-time high. An increase in the bitcoin hash rate indicates more competition among miners. The difficulty of mining bitcoin increases, which leads to more power consumption.

Nevertheless, the price of bitcoin is down almost 70% from its all-time high in November, reducing the profitability of miners.

bitcoin miner hashrate

Currently, the production cost floor for bitcoin is around $17,000. This is the cost that miners incur to produce new bitcoins. According to Charles EdwardsA crypto market analyst and founder of Capriole InvestmentsThe cost of production is rising.

This is because the hash rate is increasing, the power consumption is increasing, and in addition, the cost of electricity is increasing.

bitcoin mining production cost
Source: Twitter

Core Scientific, Once largest public miner, almost surrendered. The community believes that more such stories are more likely.

Legal trouble with bankrupt Celsius Network

Core Scientific was in agreement with bankrupt Celsius Network to provide infrastructure for hosting services. Under the agreement, the machines belong to Celsius, and Celsius benefits from any crypto mining.

Core Scientific claimed they owed $2 million for the cost of electricity at Celsius. Celsius denies the reason Core did not state in the agreement that it would pass on the rising cost of electricity. On 19 October, the Corps asked an insolvency court to compel Celsius to pay all outstanding electricity costs. They also demand termination of the agreement between the two companies.

The legal trouble with the bankrupt Celsius Network is one of the reasons for the impact on the company’s operating performance and liquidity.

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