- Bitcoin miner Core Scientific is filing for Chapter 11 bankruptcy.
- The Texas-based company is among the hardest-hit miners.
- Financial difficulties have hit more than just $CORZ recently.
As of Tuesday’s close of trade, Core Scientific was worth just $78 million, down from a peak of $4.3 billion in July 2021. Within this context, $CORZ reaffirmed earlier that it might exhaust its cash reserves before the end of the year.
The Austin, Texas-based company is among the hardest hit miners with low Bitcoin prices depressing mining revenue to a record low. Soaring energy costs and more competition among miners have plummeted profit margins.
About a month ago, the firm issued a warning that there was a potential for bankruptcy, which caused the price of its shares to drop by around 80 percent on the Nasdaq. At the end of September, the miner had 1,051 Bitcoin in their possession along with $29.5 million in cash.
The behemoth miner also feared bankruptcy if the company couldn`t find more funding to repay its debt which amounts to over $1 billion. It had a third-quarter loss of $434 million.
“We anticipate that existing cash resources will be depleted by the end of 2022 or sooner,” Core Scientific said in its third-quarter earnings report.
“Depending on our assumptions regarding the timing and ability to achieve more normalized levels of operating revenue, the estimates of amounts of required liquidity vary significantly. Similarly, it is very difficult to predict when or if bitcoin prices will recover or energy costs will abate.”
Financial difficulties have hit more than just $CORZ recently; Compute North filed for Chapter 11 bankruptcy in late September, and Iris Energy has been served with a notice of default on its debts. Greenidge Generation (GREE) and Argo Blockchain (ARBK) have also reported cash flow difficulties.
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