The largest public bitcoin miner in the world, Core Scientific, went under at the end of December due to the difficult market conditions. The ever-declining bitcoin price, the rising hash rate and spiraling energy prices eventually killed Core Scientific.
According to an application to the bankruptcy court for the Southern District of Texas, the crypto mining company agreed to transfer 27,403 of its mining rigs (about 18% of its total equipment) to New York Digital Investment Group (NYDIG). These mining rigs were used as collateral for a loan.
Loan from Bitcoin company
Core Scientific borrowed $77.5 million from the American bitcoin (BTC) investment company in 2020 to expand its activities. However, at the end of 2022, it stopped paying off debt due to declining revenues due to the bear market. However, the deal must first be approved by the bankruptcy court.
Sales of these machines will incur large short-term losses, but Core Scientific stressed that the long-term benefits of paying off the debt “outweigh the immediate loss.” It believes that this is the first step towards becoming more profitable and sustainable. They will move to a smaller but more efficient fleet of mining rigs. These were initially in their storage and were therefore not used at all.
BTC mining continues
Despite the bankruptcy, it has meanwhile continued to mine bitcoin. In the month of December, it managed to raise a yield of 1,435 BTC, which is impressive considering that production was still at 1,356 BTC a month earlier. The hash rate increased from 15.4 exahashes per second (EH/s) to 15.7 EH/s during that period.
The recent performance in the price of bitcoin obviously lends a hand to the profitability of the listed company. Recently you could read in the crypto news that Core Scientific is being helped in its resurrection by BlackRock, the largest asset manager in the world. In total, the US-based miner managed to raise $500 million in capital from parties such as BlackRock, Apollo Capital, Kensico Capital and others.