Once prominent Bitcoin miner – Core Scientific – is the latest one planning to file Chapter 11 bankruptcy protection in Texas.
Mining companies are experiencing turmoil and a lingering crisis of confidence in digital assets after the collapse of Sam Bankman-Fried’s FTX. While Bitcoin miners may not have had direct exposure to the now-collapsed crypto exchange, the subsequent turn of events and the ensuing price crash is threatening more of them with bankruptcy.
Core Turmoil
According to a CNBC report, Core Scientific’s market capitalization had plunged to $78 million as of the end of trading Tuesday, decreasing from a $4.3 billion valuation last July since the listing on the Nasdaq through a special purpose acquisition company, or SPAC.
Over the past year, its stock has depreciated by more than 98%. Despite generating positive cash flow, the cash is not sufficient for the company to repay the financing debt owed on equipment it was leasing. The firm does not plan on liquidation
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