Faced with the cryptocurrency crisis, the major operating companies are stepping up their efforts to reduce their expenses. The energy consumption being enormous, some choose to partially stop their mining machines. The miner Corz Scientific has distinguished itself in this sense in its data center in Texas with the shutdown of its machines. Its bitcoin production therefore logically fell in July, forcing it to dip into its reserves to sell massively. In the end, its realized sale of bitcoin remains more important than the production.
What explains the drop in bitcoin mining?
If we take the mining operations in July from Corz Scientific, it is only 1221 bitcoins (BTC) that the company was able to obtain. Because, the mining had to be stopped many times at the request of authorities who control the power grid in Texas, where the mining is taking place. The computing power of Core Scientific is one of the largest in the world. It’s no surprise that this infrastructure in Texas has taken a toll on the power grid.
the miner to 180,000 servers produced only 1221 bitcoins, but sold 1975 in order to increase capital and growth expenses. In all, Core Scientific took in $44 million, or $22,000 for every bitcoin sold. More precisely, this money was partly used to considerably increase the capacities of its database. Core Scientific used another portion of this money to pay Bitmain. Indeed, Core Scientific ordered 100,000 mining rigs from this supplier last year.
Decline in mining: Should we fear massive sales?
The bear market does not facilitate the mining of the king of cryptocurrencies. To stay alive, some companies continue to massively sell off their bitcoin reserves. But, the question that arises is whether this is of no consequence? It must be said that the bear market that is that of cryptocurrencies at the moment encourages this kind of maneuver. Miners are massively selling off their mined digital assets this year to pay for expenses. Riot Blockchain (RIOT) for example, said it sold 275 bitcoins in July for $5.6 million.
We remember that last June, Core Scientific had sold 7,202 bitcoins, which had enabled it to raise approximately 167 million dollars. The miner said he had less than $10 million in payment remaining for the rigs, excluding shipping and customs. However, he still holds 1,205 bitcoins and he has about $83 million in cash on his balance sheet.
This miner is a major player in the industry. Founded in 2017, Core Scientific has quickly become one of the largest Bitcoin miners in the world. As of June 30, it already had 180,000 servers, or 10% of the world’s mining capacity. The company has just informed that this provision has increased to 195,000 mining servers. This whole device produces a hashrate of around 19.3 exahash per second. According to Core Scientific, it is the highest mining power in North America. Following this announcement, its shares rose by 4%, which now places the miner above some of its direct competitors.
Conclusion
In short, miners resort to massive bitcoin sales to deal with bear markets. Core Scientific, for example, has no intention of stopping there. The miner announces its intention to sell self-mined bitcoins to pay operating expenses, finance its growth, repay its debts and maintain a decent level of liquidity. It is clear that if the bear market persists and production continues to fall, miners will no longer be able to settle for self-mined bitcoins only, other solutions will have to be found.
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