The bear market continues to wreak havoc on the crypto industry. One of the groups of actors most affected by the situation is that of mining companies. They face rising energy costs, combined with a drop in the price of bitcoin and an increase in the difficulty of mining. Compute North has already filed for bankruptcy. Argo, meanwhile, has been facing a negative balance sheet for several years. In addition, industry giant Core Scientific is on the brink and trying to hold its own. This, while waiting for an imminent recovery of the bitcoin (BTC) market. But things don’t go as planned. The bear market continues and the company’s financial situation worsens.
“A significant doubt”
Core Scientific, the American bitcoin (BTC) mining giant, has announcement that there is significant doubt about its future. The doubt weighs in particular on its ability to continue its crypto activities beyond November 2023, he explained. Core Scientific will need additional cash to survive beyond this deadline.
In addition, Core Scientific reported a loss of $435 million in the third quarter. As a reminder, in the second quarter, its net loss was $862 million. In total, the crypto business has already lost $1.7 billion between January and September.
“The ability to raise funds through financing and capital market transactions is subject to many risks and uncertainties. Current market conditions have reduced the availability of these sources of capital and liquidity.”Core Scientific said in a memo from the Securities and Exchanges Commissions (SEC).
The crypto firm has announced that it is working with law firm Weil, Gotshal & Manges, and financial adviser PJT Partners. These should help reduce operating costs, eliminate and delay capital expenditures. Stakeholders expect these measures to help increase Core Scientific’s revenue.
On the other hand, they will consider asset sales or bankruptcy protection. Their efforts could also cover liability management transactions, including the exchange of existing debt for equity or additional debt. As a reminder, Core Scientific has more than a billion dollars in debt, and BlockFi is one of its largest creditors.
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of daily and weekly so you don’t miss any of the essential Tremplin.io!
