Another victim of the “crypto winter”? The largest American Bitcoin (BTC) mining company, Core Scientific, has announced that it could run out of business by the end of the year, and would consider filing for bankruptcy. Should we prepare for the fall of this colossus?
Core Scientific on the verge of filing for bankruptcy
Core Scientific is the largest public bitcoin miner. Its possible fall is therefore particularly scrutinized by an ecosystem that has become worried. On October 26, the company filed a document with the US Securities and Exchange Commission (SEC). She explained to the American financial policeman to have arrived at a particularly critical economic situation :
“The company anticipates that existing liquidity resources will be sold out by the end of 2022or sooner. »
Core Scientific explains in the document that it is very difficult to estimate its liquidity needs, because of the volatile nature of Bitcoin. If the biggest cryptocurrency goes up explosively, it could save the mining giant. But nothing is less certain at the moment:
“Given the uncertainty regarding the company’s financial conditions, there are substantial doubts as to whether if it will have the capacity to continue to exist for a reasonable period of time.»
👉 To go further – Introduction to cryptocurrency mining
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Bankruptcy contemplated, investors could lose everything
Core Scientific is therefore considering bankruptcy, as it mentions in the document. She specifies that in the event that she proceeds to this step, “the holders of the company’s shares could suffer a total loss of their investments“. A warning that did not fall on deaf ears: the action of Core Scientific thus began to dive after the publication of the document:
Core Scientific’s share price plummets after announcement
👉 On the same topic – Energy crisis: EU ready to block cryptocurrency mining?
A colossus that is collapsing?
Core Scientific is a mining giant: it recently brought together nearly 5% of the global hashrate :
Core Scientific – the biggest public #bitcoin miner – has a 5% share of the total hashrate. Marathon and Riot follow behind, each controlling over 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 fall of this giant therefore arouses marked concern on the part of the ecosystem. Bitcoin’s hashrate would likely recover very quickly from this event, but it is the signal sent that could create 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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Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
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