Thursday, December 8, 2022

Bitcoin Mining Firm Core Scientific Nears Bankruptcy As Its Stock Price Crashes

Bitcoin Mining giant Core Scientific may be on the verge of going bankrupt after the same declared its financial situation as the year runs to an end. According to the firm, it may be running out of cash to pay its clients, thus making bankruptcy a potential reality.

Core Scientific Decries Rising Mining Challenges

It should be noted that Core Scientific’s woes reflect the situation being faced by Bitcoin miners in general. They have been having it tough since Bitcoin (BTC) experienced a sharp drop in its value earlier this year. But more than that, there is also a massive rise in the cost of electricity. So, staying in profit has almost become impossible for those in the mining business. Additionally, recent reports also suggest that Bitcoin mining difficulty is at an all-time high. 

Furthermore, Core Scientific’s filing with the U.S. Securities and Exchange Commission (SEC) on Thursday, suggests it currently holds only 24 Bitcoin and $26.6 million in cash. That is significantly lower than the amount of BTC it held in possession just a month ago. For its September filing with the U.S. SEC, it had 1,501 BTC.

The firm also confirms that it will not be able to pay its equipment suppliers this October and November. And being that the situation does not look to be improving any time soon, Core Scientific says it’s currently weighing its options regarding alternative sources of financing. Amongst such options are restructuring, raising additional capital, and hiring strategic advisors.

CORZ Crashes

Following the news of potential bankruptcy, the share price of Core Scientific (CORZ) expectedly began crashing. As of writing, the CORZ stock is down 77% in the last 24 hours and valued at $0.23, per MarketWatch data.

Core Scientific had high hopes when it listed on the Nasdaq exchange earlier in the year. However, so far, things are yet to pan out as expected considering the ongoing crypto market downturn and greater selling on Wall Street.

As of Thursday, Core Scientific is holding only 24 Bitcoin and $26.6 million in cash. This is significantly lower than the 1,501 BTC it held during the September filing with the U.S. SEC.

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