Bitcoin Mining Company Core Scientific Succumbs to Crypto Winter, Files for BankruptcyBitcoin mining company Core Scientific has reportedly filed for Chapter 11 bankruptcy protection in Texas.Core’s market capitalization at the time of writing is close to $73.6 million.The development comes on the back of a prolonged crypto winter, intensified by the FTX bankruptcy.Core Scientific, a prominent publicly traded crypto mining company in the United States, has filed for Chapter 11 bankruptcy protection in Texas.The development comes on the back of a prolonged crypto winter and weak Bitcoin price action, intensified by the FTX bankruptcy.Core Scientific Had Exposure to CelsiusCore Scientific had a market capitalization of close to $73.6 million at the time of press. Its 52-week change shows a decline of 98%. However, as per Yahoo Finance, the trailing twelve-month operating cash flow is positive at $198.94 million. Despite having good cash flows, the funds are not enough to pay the financing debt commitments.Leasing arrangements for its mining equipment account for the majority of this debt.It is reported that the company will avoid liquidation after declaring bankruptcy. This means that the business would carry on as usual while negotiating a deal with the principal creditors. Notably, the firm published a bankruptcy warning in an SEC statement in October.While temporarily stopping debt payments in the last two months, Core had issued a warning. It told its equity stockholders that they risked losing all of their investments. This was caused by the failure of Celsius and its affiliates, which Core Scientific cited in its filing as the cause of their financial worries.Due to the effects of the crypto market downturn in May, Celsius stopped accepting customer withdrawals and filed for Chapter 11 bankruptcy in July 2022. Since then, the crypto lender has been attempting to woo potential buyers for its retail and mining businesses. Increasing Costs and Reducing ProfitsSince its peak last year, the company’s mined Bitcoin has lost about 75% of its worth. As per CoinGecko, the top cryptocurrency hovered in the 24-hour trading range of $16,781 and $17,026 at press time.Additionally, according to Glassnode, the mining difficulty in December was just 3.5% lower than the all-time high. This indicates that weak price action and high difficulty continue to shave off mining profits.The miner also admitted in its October filing that the persistent decline in the price of Bitcoin, the rise in electricity bills, and the hike in the hash rate of the entire Bitcoin network have all had a negative influence on its operating performance and liquidity in many states. Competitors Report Decline in RevenueNorthern Data, a provider of high-performance computing (HPC) infrastructure and a Bitcoin miner, recently disclosed that between January and the end of November 2022, it generated 2,614 BTC from Bitcoin mining. However, due to the decline in the coin’s value, Bitcoin revenue decreased by almost 15% month-on-month. Another mining company, Riot Blockchain, disclosed third-quarter losses of more than $30 million. According to Roth Cash Partners analyst Darren Aftahi, the company will survive the challenging market owing to its robust capital position despite incurring a net loss of $36.6 million. Hut 8 Mining Corp., a company that mines digital assets, also disclosed an $18.6 million year-over-year decline in revenue to the tune of $31.7 million in Q3 2022.According to reports, short sellers have paid more attention to Hut 8 Mining and Riot Blockchain this year. Riot Blockchain is one of the largest U.S.-listed operators. Lastly, with a net loss of $75.4 million in the most recent quarter, Marathon Digital Holdings Inc. has also witnessed a stock downside. Marathon Digital Holdings disclosed an $80 million exposure to Compute North, a mining services provider that declared bankruptcy in September.
This article was originally published by Be In Crypto.