On December 21, Core Scientific will file for Chapter 11 bankruptcy protection in Texas. One of the biggest publicly traded cryptocurrency mining companies in the US is this one. Due to deteriorating financial conditions brought on by decreasing cryptocurrency prices and rising energy prices, Core Scientific has chosen to file for bankruptcy.
Despite its lender B providing $72 million in credit. Riley this week, the cryptocurrency miner was unable to perform effectively and would focus on restructuring, according to CNBC. Riley narrowly avoided bankruptcy. Core Scientific intends to continue mining until its balance sheet is reorganized.
The market capitalization of Core Scientific decreased to $78 million on Tuesday from a $4.3 billion estimate at the time of its IPO in July 2021. Over the past year, the price of CORZ stock has decreased by more than 98%. The stock price increased 3.07% to $0.21 at the close on Tuesday.
A individual with knowledge of the company's circumstances claims that the company is still producing a positive cash flow. Cash, however, is not enough to pay back the financial debt on the mining equipment it was leasing. Until an agreement is reached with the senior security noteholders, who are in control of the majority of the company's debt, Core Scientific will not liquidate and continue to run properly.
Twitter Reactions About Core Scientific's Bankruptcy
Influencers in the cryptocurrency world reported Core Scientific's bankruptcy filing on Twitter. Due to the bear market, many cryptocurrency miners are having financial difficulties.
According to crypto analyst Dylan Leclair, the company controls about 5% of the world's hash rate. He also discussed the state of publicly traded crypto miners, many of whose stock values will have fallen by over 90% by 2022.
Crypto investor and board member at Iris Energy Mike Alfred claimed that when he initially looked into the company in the summer of 2021, Core Scientific promised him that the company would have 13 EH by July of this year.
Due to the potential bankruptcy of numerous cryptocurrency miners like Argo Blockchain and Iris Energy, many individuals expressed concern about the future of bitcoin mining.