HomeBitcoin MiningCrypto Firm Core Scientific Says It's Considering Bankruptcy

Crypto Firm Core Scientific Says It’s Considering Bankruptcy


Core Scientific – one of world’s biggest publicly traded crypto mining firms – has announced it is considering bankruptcy protection as its stock has fallen by over 90 percent since the beginning of the year. The company has also stated it’s not likely to make any upcoming debt payments.

Core Scientific Says It’s Thinking About Bankruptcy

Core Scientific has been in trouble for some time. Not long ago, the firm mentioned it was going to release more than ten percent of its staff as a means of dealing with the ever-falling crypto space. CEO Mike Levitt mentioned at the time that the crypto mining scene was changing rapidly. He commented:

A lot of folks that don’t have a home for their mining equipment also don’t have capital… In the good old days, we used to be a reseller of servers, and there was margin in that. We could look at the margin of that and combine that with our hosting agreements and look at the overall profitability. Now, we really don’t have a very vibrant reseller business because most folks are going directly to the manufacturers. Our hosting business needs to stand on its own two feet.

The digital currency arena has been crashing and burning since the beginning of the year, with assets like bitcoin losing more than 70 percent of their value and the crypto arena losing more than $2 trillion in overall valuation.

As a result, Core Scientific and many other companies are likely feeling the heat and don’t seem to know what to do, thus looking at bankruptcy as the only viable option. Other companies to walk this path over the past few weeks and months include Celsius – a lending network – and Voyager Digital.

Core Scientific stock shares have fallen by about 97 percent. Last June, the firm sold nearly all its bitcoin holdings (likely at a significant loss given that was the month when bitcoin was trading in the $17K range for the first time in about two years), though the company is still down nearly $27 million.

What Alternatives Exist?

Based in Austin, Texas, Core Scientific has mentioned it’s going to look for financial alternatives so it can stay in business and customers can potentially experience few negative effects, though many analysts are claiming bankruptcy could be the only option for the ailing firm. Analysts at Compass Point recently commented in a report:

With the substantial decline in mining rig prices in 2022, we believe there’s a significant chance the creditors holding this debt decide to restructure instead of taking possession of the collateral. Still, without knowing how discussions are going with CORZ’s creditors, we think a scenario where CORZ files for Chapter 11 protection has to be taken seriously, especially if BTC prices decline further from current levels.

Nick Marinoff
Nick Marinoffhttps://www.livebitcoinnews.com/
Nick Marinoff is currently a lead news writer and editor for Money & Tech, a San Francisco-based broadcasting station that reports on all things digital currency-related. He has also written for a number of other online and print publications including Black Impact Magazine, EKT Interactive, Seal Beach USA and Benzinga.com, to name a few. He has recently published his first e-book "Take a 'Loan' Off Your Shoulders: 14 Simple Tricks for Graduating Debt Free" now available on Amazon. He is excited about the potential digital currency offers, particularly its ability to finance unbanked populations and bring nations together financially.

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