A Leading Bitcoin Mining Firm Has Filed for Bankruptcy

It is quite painful for the crypto community to see all the big names in the industry going through a major crisis.

This looks like a great economic recession where one big name follows another on its way to insolvency.

It is a fact that so far, there is no FDIC that backs the digital assets owned by the public.

Experts, on the other hand, do believe that now is the time for the fed and treasury to come up with legislation.

These big crypto firms should be held responsible for offering protection to investors in case of bankruptcy.

Most recently, the demise of FTX has caused investors millions.  A group of analysts has demanded strong regulations on Bitcoin as well.

Experts have taken such a firm stance because, recently, a number of crypto platforms have filed for article 11 bankruptcy.

This is harsh on investors as they suffer heavy losses because they are not covered for this loss.

Most recently, a public limited bitcoin mining company named Core Scientific (CORZ) has publicly stated that it has gone bankrupt and filed for protection under article 11.

The company has asked for the U.S. government’s help in order to stay operational.

The Company’s Official Report Has Shared the Key Factors Behind this Collapse

The report has revealed that constant decreases in Bitcoin prices, immensely high electricity bills, and lack of funds played a decisive role in this bankruptcy.

The recent slump in the price of Bitcoin and all the other digital tokens have worsened the situation for Core Scientific.

The chances are very rare that the crypto mining firm can receive any financial grant from the officials.

Core Scientific (CORZ) Has Publicly Announced Its Current Financials

The company’s official numbers indicate assets and liabilities between $1 and $10 billion. It currently has creditors near 5,000 or slightly below.

Currently, it can only distribute funds to its unsecured creditors. As of today, at press time, the company’s share price declined by 25%.

All these indicators clearly conclude that Core Scientific can’t receive any positive response from the authorities. Moreover, its current troubles are only going to rise.

Cryptocurrency market experts are certain that current market conditions will show a minor recovery by 2023. But major changes will only occur by the mid of 2023.

When Did Core Scientific Became a Public Limited Company?

The company went public back in 2021 through the merger of SPAC. In November 2021, the company’s market share touched its highest-ever share price at $14.32.

During the current crypto winter, the company’s share price has declined by 98%. As a result, the company’s financial stability has become nearly impossible.

Those who own the company’s shares are selling them rapidly to avoid further loss. Moreover, the downfall in the price of Bitcoin has also proven a killer for this mining giant.

Let’s talk of Bitcoin; the price of BTC has declined by 65% this year. From $47k, now the crypto token is available at $16k.

The situation has become further hard for the mining business as energy costs are at a record high. On the other hand, inflation is also mounting.

Core Scientific is not the only crypto mining firm that has filed for insolvency; back in September, another miner named Compute North filed for bankruptcy.

The firm was liable to pay $500 million to almost 500 creditors. As the current crisis prolongs, more and more established names in the mining industry are struggling.

Moreover, market experts do believe that if somehow ‘Core Scientific’ managed to avoid this collapse, its sustainability would still be a question mark.

Given the current circumstances, sustainability in the mining business is impossible. The market indicators are not supportive and also very uncertain. That is why officials may be least interested in granting financial help to Core Scientific. It is quite clear that mining is not a viable investment anymore.

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