The Crypto bear market hit hard as Bitcoin mining giant Core Scientific declared bankruptcy.
Core Scientific (Ticker: $CORZ) is one of the largest publicly traded crypto mining companies in the United States of America. On Dec 20, 2022, it declared bankruptcy and will be filing for Chapter 11 bankruptcy protection in Texas, US.
Core Scientific is specialized in mining Bitcoins and other cryptocurrencies that follow proof-of-work consensus mechanism. It requires high-end supercomputers, data centers & expensive equipment to mine digital currency.
The investment in infrastructure & power alone is enough to make a small company go bankrupt with minor price fluctuations. The company is still cash positive (positive cashflow) but it is unable to generate enough cash to pay for the debt it used to purchase & install equipments.
The company was listed publically in July 2021 at $4.3 billion valuation during the crypto bull market. The current valuation stands at $78 million while the stock price has crashed by 98% from all time high last year (Currently trading at $0.21).
The company has no plans for liquidation but to restructure its business operations and loans. It will be business as usual after reaching similar ground with creditors.
It is also to be noted that Celsius Network, one of the largest crypto lending platforms was once the customer of Core Scientific before filing for Chapter 11 bankruptcy in July 2022.
Meanwhile, Bitcoin price has nosedived to $16,800 from an all-time high $69,000, eliminating all the gains it made last year. 2022 has been the windfall for top crypto projects like BlockFi, Genesis, Voyager Digital and Celsius.
With two back-to-back collapses i.e LUNA and FTX exchange, the market doesn’t seem to recover anytime soon. It is going to be ice-cold winters for the next few months.
The Latest Crypto Headlines:
- Italian Luxury Carmaker Ferrari to launch Ferrari NFT with Solana backed Velas
- Bankrupt Voyager Digital to be bought by Binance US for $1 billion
- Binance Fires TokoCrypto CEO. Takes full control of the Indonesian exchange
Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.