Another victim of the “crypto winter”? The largest American Bitcoin (BTC) mining company, Core Scientific, announced that it may go out of business by the end of the year, and that it would consider filing for bankruptcy. Should we prepare for the fall of this colossus?
Core Scientific is about to file for bankruptcy
Core Scientific is the largest public bitcoin miner. So a concerned ecosystem scrutinizes the potential fallout. On October 26, the company filed a document with the US Securities and Exchange Commission (SEC). She explained to the American financial police that they encountered a critical economic situation :
“The company expects existing liquidity resources they will be sold out by the end of 2022or earlier. »
Core Scientific explains in the document that it is very difficult to estimate its liquidity needs, due to the volatile nature of Bitcoin. If the biggest cryptocurrency goes up explosively, it could save the mining giant. But nothing is so certain at the moment:
“Given the uncertainty surrounding the company’s financial conditions, there is considerable doubt as to whether or not it is will it have the ability to continue to exist for a reasonable period of time.»
👉 To go further – Introduction to cryptocurrency mining
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In the event of bankruptcy, investors could lose everything
Core Scientific is considering bankruptcy, as stated in the document. She states that if she continues to this stage, “the holders of the company’s shares could suffer a total loss of their investments“. A warning that did not fall on deaf ears: Core Scientific’s action began to plummet after the publication of the document:
Core Scientific’s share price fell following the announcement
👉 On the same topic – Energy crisis: EU ready to block cryptocurrency mining?
A falling colossus?
Core Scientific is a mining giant: it recently merged almost 5% of the global hashrate :
Core Scientific – the largest community #bitcoin miner – has a share of 5% of the total hashrate. Marathon and Riot follow behind, each controlling more than 2% of Bitcoin’s hashrate.
In total, there are seven public bitcoin miners with a hashrate share of more than 1%. pic.twitter.com/ZnwsFjvQcy
— Jaran Mellerud (@JMellerud) October 24, 2022
The collapse of this species is therefore a significant concern for the ecosystem. Bitcoin’s hashrate is likely to recover very quickly from this event, but it is the signal sent that could cause a cascade of consequences, including on the actions of other mining companies.
👉 To read – What do Bitcoin (BTC) miners (really) calculate?
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Published by Editions Larousse
Source: Security and Exchange Commission
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