This Publicly Traded Bitcoin Miner Lost $1.7 Billion In 2022

This Publicly Traded Bitcoin Miner Lost $1.7 Billion In 2022


Core Scientific Inc., the largest publicly traded Bitcoin mining business in the U.S., reported a $1.7 billion loss for the first nine months of the year. The Austin, Texas-based business is one of the miners that has been most hit, as low Bitcoin prices have caused mining revenue to drop to an all-time low.

Dwindling Profit Margins

Profit margins have collapsed as a result of rising energy prices and increased mining competition. Core Scientific initially issued a warning in October that it might have to declare bankruptcy if it can’t obtain more capital to pay off its debt, which totals more than $1 billion. It suffered a $434 million loss in the third quarter.

As of last month, the corporation owned $32 million in cash and 62 Bitcoin, down from over 8,000 at the beginning of the year. It dumped the majority of its Bitcoin holdings in the second quarter as the price of the cryptocurrency fell by over 60% and U.S. heat waves drove up power expenses.

Uncertain Market Volatility

Consequently, the miner has found it increasingly challenging to generate additional capital through equity sales and debt financing as lenders have scaled back their lending and investors have pulled out of the choppy market. The value of the company’s stock has decreased by approximately 99% this year, to just 16 cents.

Read more: Bitcoin Miners Start Selling Most Aggressively In The Last 7 Years

Core Scientific missed several debt payments in October because it expects its financial reserves to run out by the end of 2022 or earlier. It may most probably look for assistance under the relevant bankruptcy procedures. Given the size of the corporation, insolvency can have a significant effect on the mining sector.

The miner contributes over 10% of the computing power needed to secure the entire Bitcoin network. More than 40% of its 243,000 servers are part of hosting agreements, under which Core Scientific offers its clients, including other significant miners who lack their own hosting sites, data center space and related services to run mining equipment. According to the company’s third-quarter report, some of the clients have filed lawsuits against Core Scientific this month, accusing the miner of failing to make or return payments.

Pratik has been a crypto evangelist since 2016 & been through almost all that crypto has to offer. Be it the ICO boom, bear markets of 2018, Bitcoin halving to till now – he has seen it all.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.


Source link

Share this post

Leave a Reply

Your email address will not be published. Required fields are marked *